Robert M. Slutsky Associates
Elder Law Newsletter

Newsletter10: January 2007

First, we want to say how much we appreciate having you all as friends and clients. We have learned a great deal from you and it has been our pleasure to serve you over the last year. We hope everyone had a great holiday season and is not sweating too much (60s in January!). Next, we want to wish you all a 2007 with good health, family, friends and prosperity of every sort. Read on. . . .

Steps for Managing Mom and Dad’s Finances

1. Find all of your parents' financial accounts and documents. If your parents keep their bank and investment files in an easy-to-find place, consider yourself lucky. Otherwise, your best bet is to locate your parents' most recent tax return. Most of your clues will be on Schedule B, where they listed dividends and interest income and the names of financial institutions. If your parents are still well, encourage them to assemble a file or "financial map" that details the location of their financial accounts and safe-deposit boxes, as well as the names of their financial professionals.
   
2. Collect and start paying bills. If you have any concern that Mom and Dad won't have enough money to pay their bills and medical expenses, cool your jets first. Be sure you have a list of all assets and expenses before you start paying routine bills. You may need to consult an Elder Law attorney or financial planner for help and to prioritize what should be paid and what can wait.
   
   If you don't have access to your parents' checking account, consider paying their bills yourself and getting reimbursed later.  Only do this if you're absolutely sure your parents have enough money to repay you.
   
3. Locate Power of Attorney, Will, Living Will and Trust Documents. Without being named as agent in a power of attorney for your parent or being successor trustee in his or her trust, no one will provide you with any information. More important you will not be able to make medical decisions for mom or dad if necessary (all this even applies to spouses). Remember keep the original documents in a safe and easily accessible place (usually NOT the safe deposit box at the bank given its limited access). A financial institution may not allow you access without at least seeing the original document so keep it handy.
   
   If your parents do not have these documents, make sure you get to a good Elder Law attorney before they are too cognitively impaired to execute them. If they are too impaired you will need to be appointed their legal guardian which is more expensive and under Court oversight.
   
4. Open Safe Deposit Boxes: Do this with a witness so there are no disputes as to what is in there.
   
5. Keep Good Records: If you are helping mom and dad, keep a paper trail not only for the family members who may question you but for long term care applications and other situations where up to five years of financial information may be necessary.
   
6. The List: All: Bank accounts and numbers, life and health insurance policies and numbers, deeds to all real estate, loan and credit card information, social security numbers and medicare information, military history and group affiliations, POA, will, trust, instructions for funeral services, prepaid burial and funeral account information.
   
7. Bring in an Expert: An Elder Law attorney can help you organize and make sure you understand what long term issues are coming and how to prepare for them. A financial planner can help mom and dad invest what assets they have most productively. A good CPA can help make the best of tax deductions that are available.

Caring for Mom and Dad as a Family

Watching mom and dad decline is difficult. If the family is not working as a unit, this makes everything much worse.

1. Make Sure Everyone is on the Same Page: Everyone must understand mom’s condition. If one child does not see mom often and does not see the decline in her condition, that child may see your concerns as a power grab. Fill siblings in on the details of changes in mom’s condition as it happens. Have a geriatric assessment done. Have the disconnected sibling speak to the doctor.
   
2. Teamwork: When something has to be done, don’t assume the closest child will do it all. Ask for volunteers. This also has the effect of keeping everyone in the loop regarding mom’s care. A sibling far away might pay dad’s bill online while a closer one can handle the food shopping.
   
3. Talk About Money: Have a frank discussion about what is there, anticipated costs and what will happen. Consult a financial adviser and share the results.
   
4. If You Cannot Agree, Get a Referee: Sometimes you need an outside person to act as a neutral and to guide what needs to be done. This can be a friend, geriatric care manager or social worker.

Keeping Mentally Sharp as We Age

Build Memory Muscle: As you go through the day try pairing a series of words (maybe the names of the new clients on your sales list) with a visual image. Or connect items on your grocery list with items on your desk (imagine spilled milk on your stapler, etc). Your short term memory stores 5-9 items for up to 30 seconds. By repeating a longer sequence you force it to hold the image for a longer time. Short term memory loss is what tends to decline the most as we age.

Keep Learning: Sign up for a class in something completely new to you. Learning helps the mind stay flexible. Acquiring new knowledge keeps neurons firing now and they are more likely to continue to do so. In addition, new skills can improve your skills at work and other things.

Relax: Meditation and yoga can help you with recall. Take a few moments and relax in a quiet place. Often this can assist with recalling thoughts and goals you forget in your hectic day.

Interest Rates and the Housing Market

Rates have stabilized in the low 6% range for a 30 year no point loan.

The housing market continues to moderate. For the first time in many years, year over year prices have dropped. These drops have mostly affected areas where the gains have been the largest (parts of California, Florida, Arizona, Nevada). While the market is certainly softer now in this area than in was a year ago, the bottom has not dropped out. Properties are staying on the market longer and sellers (especially new home builders) are making accommodations to move inventory.

The Federal Reserve Bank has paused raising short term interest rates. However indications that the job market is tight and other structural inflation (despite the recent drop in fuel prices) indicates there may be one or two more rate hikes in the near future and certainly little indication of a rate drop in the near future. This may be good or bad for mortgage rates depending if the markets perceive the rate hikes as stamping out inflation or as a harbinger of stronger inflation ahead.

Remember that most Home Equity Lines of Credit have an adjustable rate. You may have taken them out when rates were lower but they can skyrocket (and may already have) as rates rise. Refinancing into a fixed rate mortgage may be advisable at this time.

People who have seen their adjustable rate and negative amortization loans adjust upwards should consider refinancing NOW.

In addition to Elder Law, our firm practices real estate law and originates mortgages. Please call us at (610) 940-0650 with any questions or for rate quotes.

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Robert Slutsky, Esq. has been practicing Elder Law for 14 years. He helps families in Montgomery, Delaware, Philadelphia, Chester and Bucks Counties. Mr. Slutsky has represented local Area Agencies on Aging, long term care facilities and was a member and officer on the CAPS Board of Directors for over 10 years. Home visits are available. You may reach him at (610) 940-0650, robslutsky@comcast.net or the website at www.slutskyelderlaw.com.

DISCLAIMER: The content of this Newsletter is for general information only. It is not intended to be legal, tax, financial, medical or other advice. The reader should obtain legal, tax, medical or other advice from a competent professional to address his or her specific needs. We do not endorse any particular service provider. If a service provider is mentioned in an article it is simply because we may have come across them in our travels and cannot speak to their quality of service or integrity.