Ronald Morton's Elder Law Blog

Coffins at Wal-Mart?

Wal-Mart plans to offer coffins for sale to its customers.  Steel coffins will run $895, bronze cost $2,899.  Customers can plan ahead by paying for the caskets over 12 months with no interest. The retailer is offering caskets at prices that undercut most funeral homes.  Funeral home are required to accept caskets provided by third parties. 

Medicaid as Vehicle for Healthcare Reform

There is a good article that summarizes some of the proposals for covering about 11 million of the nation's uninsured using the existing Medicaid programs operated by the States.  A proposal our governor has called the mother of all unfunded mandates.  

Religion Clause in Trust is Valid

The Illinois Supreme Court recently ruled that a clause in a trust that provided an inheritance be divided among grandchildren, but disinherited any that married outside of the Jewish faith, was enforceable.  In the suit, only 1 of the grandchildren had married a Jew, with the rest being married to Gentiles.  The disinherited grandchildren sued the trust claiming that the marriage clause was void as against public policy.  The Supreme Court of Illinois disagreed, determining instead that the restriction "does not operate prospectively to encourage the grandchildren to make certain choices regarding marriage.  It operated on the date of [the grandmother's] death to determine which, if any, of the grandchildren qualified for distribution on that date." The court was careful to make a distinction between a condition precedent clause such as this, from a clause that sought to control ongoing behavior. Those contemplating limiting heirs' inheritance as a result of their conduct, and especially conduct with broad public policy ramifications such as marriage or race, would be wise to carefully craft such clauses such that they are seen as neutral qualifiers rather than ongoing control over heirs.  The latter can put the clause in jeopardy. 

McNair Paternity Results are In

The recently revealed putative heir of Steve McNair's isn't his after all.  The results of paternity tests released yesterday reveal that Clover Lee's 17 year old daughter is not the former Titan's daughter. 

New Book Features Estate Planning Blunders of the Rich and Famous

Co-authors Andrew Mayoras and Danielle Mayoras, who publish the Probate Lawyer Blog,  have published a new book, "Trial & Heirs."  The book uses real stories of the rich and famous to illustrate estate planning errors to help readers steer clear of these same erros as they plan for their own "heirs." The stories cover well known legal fights over famous fortunes: including the recent battles over Michael Jackson's estate, along with other celebrities like Ted Kennedy; Anna Nicole Smith; Brooke Astor; Heath Ledger, Ray Charles; Princess Di; Jimi Hendrix; Frank Sinatra; Martin Luther King Jr.; and Rosa Parks... as well as many others that most people aren't even aware of. The book gives readers a front row seat in the courtroom while the authors replay the "tabloid drama", point out what went wrong in these riveting cases, and teach readers how to avoid similar errors.  I have enjoyed their blog for many months - I suppose it is the equivalent of the National Enquirer for estate planners - and look forward to reading the book.

Cost vs Value

The other day I received a phone call from a former client's child whose mother's condition had changed from the time we did planning for her mother.  Through the conversation I was able to point out opportunities for saving a significant portion of the mother's assets, about $200,000, and qualify her immediately for about $1,000 per month in new benefits.  She was excited to learn this until she asked about the fee and discovered it would cost between $5,000 and$8,000 to implement this planning.  She concluded the call with,"I'll think about it," which is usually polite speak for "no."  Sadly, this client, by refusing to spend now the equivalent of about 1 and a half months cost of a nursing home room, is going to miss out on over $12,000 per year in immediate benefits and the ability to save over $100,000 in assets.  Her focus was on the cost of planning rather than the value that she would receive from that fee.  Sadly, the cost of her failure to plan will result in significantly greater loss to her than the cost of planning.

Medicaid Declares Planning Fees a "Rip Off"

Yesterday my client was informed by a Medicaid case worker that the $6,500 fee that they paid me for planning their estate was a "rip-off."  Under the case worker's analysis, the client should return all transferred assets, spend down all of the parent's money, and when the assets got down to $4,000, they will qualify for benefits.  Under the plan that we designed for the client, they were able to keep over $150,000 in assets and qualify their parents for Medicaid immediately.  $4,000 vs $143,500 ($150,000 - $6,500 fee).  Exactly who is ripping who off?  The moral of this real life story:  Beware Medicaid workers bearing advice. 

If Malpractice Reform is Answer to Runaway Costs, Why Havn't My Premiums Gone Down?

The other curious thing about the healthcare debate as it relates to Mississippi is the claim by Republicans that malpractice reform will play a significant roll in reducing healthcare costs.  Mississippi enacted significant malpractice reforms about 5 years ago under the argument that high malpractice premiums were driving doctors out of the state.  The reforms have basically assured that victims of malpractice cannot be adequately compensated for their physical loss/pain & suffering.  In fact, they cannot even afford to bring suit unless their lose is extremely severe due to the practical costs of litigation and the caps on recovery. As a result, very few malpractice suits are now filed in the state, which, if you follow the logic of Republican leaders like our state's own Haley Barbour, should also mean that healthcare costs have been dramatically reduced (i.e. doctors no longer have to practice "defensive medicine").  But, I have not seen any reduction in my healthcare premiums, and to to contrary, have seen increases nearly double the rate of inflation, and consistent with increases throughout the rest of the country that did not enact malpractice reform.  Barbour talks on the national circuit about malpractice reform being the answer to runaway healthcare costs, yet he can't even show how it has reduced costs in his own state.  Curious.

Hospitals Increase Lien Filings in Effort of Increase Revenue

The Shelby County Health Care Corp., known locally as The MED, has dramatically increased its lien filings in Tennessee Circuit Court, relying on a state law giving hospitals the right to perfect their lien within 120 days of a hospital discharge.  Lien filings increased from a number so small it was unreported in 3rd Quarter of 2008, to 531 in 3rd Quarter 2009.  No doubt, this more aggressive stance is indicative of the budget constraints that hospitals everywhere are under, and the need to find money anywhere they can.  Hospitals have always been among the most diligent of creditors of an estate to probate a claim so this trend is merely expanding the hospital's practice of lien enforcement.  While I have not seen any statistics for Mississippi, I suspect that similar increases are being seen in Mississippi courts in search of additional sources of revenue.  One trend that has been seen in Mississippi is the pursuit of liens by third party intermediaries such as MedPay Assurance.  These liens are asserted in both personal injury cases and estates, and seek reimbursement for the entire "retail" value of whatever procedure was performed, rather than the price that the hospital agreed to accept from the insurer such as BC/BS.  This can be as high as 300% of the price that the hospital had originally agreed to accept for the procedure, and illustrates the aggressive stance that many hospitals are taking with regard to money owed to them.

Curiously, despite the high levels of uninsured's, reaching in excess of 19% in Mississippi, hospitals have not been enthusiastic supporters of healthcare reform and a public option which would dramatically decrease the number of uninsured in the state and insure payment to these hospitals for their services.  I suspect that this is because hospitals have calculated that they will make more money under the existing system that only pays them for some of their patients at a high rate, than a system that will pay them for all of their patients at a government negotiated or set rate. 

New Potential Heir in McNair Estate

There is a potential new heir to the Steve McNair estate. In papers filed Friday, Clover Lee claims that McNair is the father of her 17 year old daughter.  If that is proven to be correct by DNA testing, the 60% of the football millionaire's estate set aside for his children will be divided 5 ways instead of 4.  Also, the judge has ruled that McNair's restaurant can be sold by the estate, despite the objection of its co-owner. 

McNair's estate is a lesson in the benefit of planning.  Had he created a will or trust that named his heirs and defined the portion each was to receive, the appearance of unknown heirs would not be an issue.  Likewise, had he and his business partner planned for the treatment of his restaurant or other business interests, the disposition of those assets would not be left up to the discretion of a probate judge, but would be determined by the agreement of the parties themselves.  If you think that your planning is incomplete, feel free to call my office and set up a complementary phone or office appointment.