NATIONAL HANDBOOK

ON LAWS AND PROGRAMS

AFFECTING SENIOR CITIZENS

AMERICAN BAR ASSOCIATION

SENIOR LAWYERS DIVISION

© 1998 American Bar Association

The materials contained herein represent the opinions of the authors and editors and should not be construed to be the action of either the American Bar Association or the Senior Lawyers Division.

Nothing contained in this book is to be considered as the rendering of legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel. This book and any forms and agreements herein are intended for educational and informational purposes only.

This publication may be reprinted and/or adapted, provided such use is for informational, non-commercial purposes only, that it is distributed at or below manufacturing cost, and that it includes the exact copyright notice as it appears below.

Copyright © 1998 American Bar Association. All Rights reserved. This handbook is based on the Senior Citizens Handbook: Laws & Programs Affecting Senior Citizens in Virginia Copyright © 1996, The Virginia State Bar, 707 East Main Street, Suite 1500, Richmond, VA 23219-2803

ACKNOWLEDGMENT

The Senior Lawyers Division acknowledges the work of the Virginia State Bar in the preparation of a Senior Citizens Handbook, which was the genesis of our Handbook. In particular, the Division expresses its appreciation for the work of the University of Virginia law students and to Lora Hamp of Virginia Commonwealth University, who were the principal drafters of this Handbook.

FOREWORD

The National Handbook on Laws and Programs Affecting Senior Citizens is a reference guide offered by the Senior Lawyers Division of the American Bar Association to state bar associations, senior lawyer groups and other selected organizations to disseminate to senior citizens and the general public. Originally developed by the Virginia State Bar, the handbook has been one of its most successful public service educational publications. The book describes Federal laws and programs, including Social Security, Medicaid and Medicare; and gives an overview of such topics as housing options, wills and probate, health care, long term care, nursing homes, continuing care retirement communities, advance directives, powers of attorney, guardianship and protection of legal rights, legal assistance, age discrimination, elder abuse, and a consumer guide. The discussion of these topics is designed for lay persons and explained in clear, easy-to-understand language.

Recipients of the handbook are encouraged to "customize" this book by creating and adding material not covered in the original, but which the recipient organization believes will be of interest to seniors residing in its area. As the handbook is published in loose-leaf format, additional material can easily be added.

Bar association and senior lawyer groups will receive written permission to reproduce the handbook in quantity, provided credit is given to the Senior Lawyers Division of the ABA and the Virginia State Bar; and the books are not sold for profit.

Information contained in the handbook is not meant as legal advice and the reader should consult with his or her attorney before acting upon any of the information in the handbook.

Additional copies of the handbook may be obtained for $10 each from the Senior Lawyers Division, American Bar Association, 750 N. Lake Shore Drive, Chicago, Illinois 60611.

National Handbook on Laws and Programs Affecting

Senior Citizens

Different types of benefits are payable under various provisions of the Social Security Act, but when the average person uses the phrase "social security benefits" he or she usually means the Retirement, Survivors, Disability and Health Insurance Program (RSDHI). These are monthly cash benefits paid to you as a retired or disabled worker, to qualified spouses, children, and parents of retired or disabled workers, and to qualified widows, widowers, and divorced spouses of workers.

The RSDHI program is largely financed out of taxes paid by employers and employees. It is an insurance program. Benefits received by you and your dependents have been earned by you through your employment and the taxes collected regularly from your wages. These tax deductions are shown on your paycheck next to the initials "FICA." The letters "FICA" stand for "Federal Insurance Contributions Act," which is the official name for the federal laws which established the Social Security program in 1935. These deductions go up periodically. The money collected from this tax goes into trust funds, and current benefits are paid out of these funds.

Eligibility for Social Security benefits depends on the length of time you have been working and paying Social Security taxes. Generally, an individual is eligible for benefits after a lifetime total of ten years in employment covered by Social Security. "Covered" employment refers to all employment and self-employment in which the employee and employer are obligated to pay a payroll tax to the Social Security Administration. The ten years may be calculated by adding up the total number of "quarters" worked by the individual. A "quarter" is defined as a three-month period; that is, there are four quarters per year. Thus, ten years of employment is the equivalent of forty quarters.

If you stop working before you have the forty quarters needed to qualify, your quarters will be kept on record. If you start working again, your quarters will continue to accumulate. In some cases, you may not need the forty quarters to qualify for benefits. To find out how many quarters you have or how many you need to qualify, contact your local Social Security Administration Office.

The amount you receive in Social Security retirement benefits is dependent on how much income you averaged over your career. If you made a high amount of income, your benefits will be proportionately greater than if you had periods of no work or low salary. Your level of benefits is also affected by when you begin receiving Social Security.

If you are eligible for benefits, certain family members can also receive benefits:

your spouse age 62 or older,

your spouse under 62 if caring for a child under 16 years old or a disabled child,

your former spouse age 62 or older and unmarried (provided you were married 10 years or longer),

children up to age 18,

children up to age 19 if still in school,

children over age 18 if disabled before the age of 22, and

a widow or widower in certain situations.

Individuals are eligible to receive full retirement benefits at age 65, providing they have obtained the necessary work quarters and have worked for the requisite amount of time. It is possible to obtain benefits at 62 years of age, but the amount you receive will be reduced by 20 percent. If you do not take Social Security at 65 years of age and continue to work, you will receive additional money when you apply for and receive your Social Security Benefits. Your benefits will be raised by a certain percentage each year that you delay retirement.

You can also choose to receive Social Security benefits after age 65 and remain at work. Between the ages of 65 and 69, your Social Security benefits will be reduced slightly if you are making over $13,500 per year. (The amount of this earnings limit changes every year.) When you are 70 or older, you can work and receive full Social Security benefits with no limit on earnings. If your post-retirement earnings are greater than your earnings in pre-retirement years, you may be entitled to larger Social Security benefits. Ask your local Social Security office to recalculate your benefits if your post-retirement earnings have significantly increased.

A year before you retire you should consult with a Social Security representative to help you plan the best time to apply to get the maximum benefits. There are advantages for some people in retiring at age 62, and for others it makes sense to wait until later. Your Social Security representative can help you interpret the complex rules.

Note: If you choose to delay your retirement, generally you should still sign up for Medicare at age 65. See your Social Security office for more details.

When a fully insured worker or retired worker dies, survivor’s checks can go to certain members of the worker’s family:

surviving divorced spouse over age 60 (or age 50 to 59 if disabled) provided you were married 10 years or longer, widow or widower under age 60 if caring for a child under 16 years old or disabled child, unmarried minor and disabled children, and parent of a deceased worker if parent is 62 or older and was dependent on the deceased worker for half of his or her support.

When a fully insured worker or retired worker dies, a small lump sum death benefit may be paid to an eligible surviving widow, widower, or entitled child.

There are benefits for certain disabled persons who are not old enough to qualify for regular Social Security payments. If you are disabled and have worked under Social Security for more than five years, you may be entitled to Social Security disability payments. For a worker to qualify for disability benefits, the worker must be unable to engage in any substantial gainful activity due to a physical or mental impairment that is expected to result in death or has lasted, or is expected to last, for at least 12 months.

An individual is eligible for Social Security Disability Insurance (SSDI) on the date he or she becomes permanently disabled. From this date, there is a waiting period of five months before benefits begin. In the event that an applicant is approved for SSDI after the sixth month of disability, the Social Security Administration will make a retroactive payment.

The level of monthly disability benefit is determined by the amount of one’s earnings, age at onset of disability, and date of disability. You may receive an estimate of your benefits through your local Social Security office.

If you are eligible for SSDI, certain family members may also be eligible for benefits:

your children under 18,

your child who was disabled on or before age 22,

your spouse, if 62 or over,

your spouse if under 62 and caring for a child under 16 or disabled.

There are also benefits for certain disabled adults and minors who have not worked under Social Security or do not have enough credits to obtain regular Social Security benefits. The program is called Supplemental Security Income. If you or your child is disabled, you may be entitled to such payments. In both of those situations you should contact the Social Security Administration local office and file an application. You may also contact a counselor or attorney to help in this claim. Any fees will come from whatever you receive and are set by the Social Security Administration.

Apply for benefits by going to your local Social Security office, or calling the toll-free number: 1-800-772-1213. The Social Security Administration has many free pamphlets and articles to advise you of your rights and duties. They will inform you on how to apply for benefits and how to receive your benefits. Social Security will also furnish a form allowing you to check the status of your Social Security account.

If your application for Social Security benefits is denied OR if any of your benefits are reduced or terminated, you have the right to appeal the decision. The appeals process has four steps: 1) reconsideration, 2) administrative hearing, 3) review by Appeals Council, and 4) federal court.

Step 1: Make a written request for reconsideration within 60 days of the date you receive notice of the denial. If you have been receiving benefits and you receive notice that your benefits are being reduced or terminated, you must make the request within 10 days so your benefits will continue during the appeal. A Social Security representative will help you with your request.

Step 2: If you are not satisfied with the result of the reconsideration, you may appeal again and ask for a hearing before an Administrative Law Judge. Many decisions are reversed after the hearing. You must request the hearing within 60 days of the date you receive notice of the reconsideration decision.

Step 3: If you disagree with the judge’s decision, you may request a hearing by the Social Security Appeals Council in Arlington, Virginia, within 60 days of the hearing decision.

Step 4: If the Council refuses to hear your case or decides against you, you have another 60 days to appeal to a federal court. At this stage, if not before, you should seek assistance from an attorney. 

Contact your local Area Agency on Aging or Legal Aid office for assistance with your appeal.

Every month, thousands of Social Security beneficiaries receive documents entitled "NOTICE OF OVERPAYMENT". Overpayment occurs when the Social Security benefits you receive are more than the amount for which you are eligible. If you receive notice of overpayment which tells you that you will have to pay back the money or it will be withheld from your future check, you have the right to appeal that decision. You should appeal within 30 days of receiving notice of overpayment. In order to protect your rights, you should request one or both of the following:

Reconsideration of Overpayment: You have the right to ask the Social Security Administration to look at the decision again. Request reconsideration if you feel you were not at fault in causing the overpayment and if repayment of the money would create a serious hardship for you.

Waiver of Repayment: You have the right to ask that the Social Security Administration not recover the overpayment. Request a waiver if you feel no overpayment ever occurred or if the amount which Social Security claims is overpaid or wrong

A "representative payee" is a person or organization designated to receive Social Security benefit checks on behalf of a beneficiary who may not be able to manage his or her own affairs. The representative payee has the primary responsibility of using the Social Security check for the beneficiary’s basic or personal needs. Usually, the representative payee is a spouse or other relative, friend, or legal guardian. Institutions, such as nursing homes and mental health centers, may also be designated to receive Social Security benefit checks on behalf of a beneficiary.

To have a representative payee appointed for a beneficiary, the Social Security Office must be notified that the individual is incapable of handling his or her own affairs. The Social Security Administration can then appoint a payee if it decides that this is in the individual’s best interest. The SSA makes such decisions based on doctor reports, court decisions, and statements from others who know the beneficiary.

If a representative payee is appointed for you, The SSA must tell you in writing before sending benefits to the payee. Any appointment may be challenged by appeal. If your representative payee does not use your benefit check for you, the SSA may have to reimburse you. You should immediately contact the SSA with reports of misuse of benefits

You can sign up to have your Social Security check deposited directly into your bank account. Ask about this option when you sign up for benefits. Direct deposit will become mandatory for Social Security recipients on December 31, 1998.

Supplemental Security Income (SSI) is a federal program administered by the Social Security Administration which provides income assistance to aged, blind, and disabled persons. The SSI program provides monthly cash payments to those individuals who meet income and eligibility criteria. Essentially, the program guarantees a certain income to an individual or couple. SSI will provide supplemental payments so that the total income for an individual or couple will equal the guaranteed amount. The SSI program is administered by the Social Security Administration, but it differs from Social Security retirement or disability benefits because you can get SSI even if you have never paid into the Social Security system.

You must be at least age 65, blind, or disabled and have only limited income and assets in order to qualify for SSI. Under the SSI program, "blindness" is defined as the following:

Central visual acuity of 20/200 or less in the better eye with the use of a corrective lens, or

Visual field restriction to 20 degrees or less.

"Disabled" is defined as inability to engage in any substantial gainful employment due to a physical or mental impairment, which has lasted or is expected to last for at least 12 months or is expected to result in death.

An individual or couple must satisfy the following asset and income requirements for eligibility

An applicant’s assets must total less than $2,000 for an individual or $3,000 for a couple, after certain deductions and exclusions are made.  An applicant’s income also must fall below specific limits after certain exclusions and deductions. (Income limitations vary from state to state.)

If your resources are over the eligibility limit, you may transfer your assets or spend them down to the resource level required for eligibility. In order to prove you no longer own the resources, you should keep receipts and other records of the ways you spend down your resources.

The following assets are NOT counted for SSI eligibility:

your home and the land it is on;

household goods and personal property that do not exceed $2,000 in value;

the full value of your car if it is needed for employment or medical reasons, otherwise up to $4,500 in value;

life insurance if the face value is $1,500 or less;

money set aside for burial expenses up to $1,500 ($3,000 for couple);

burial space;

property that cannot be sold.

In some cases, SSI recipients are eligible for other low-income assistance programs, such as food stamps. In thirty-eight states, SSI recipients are automatically eligible for health benefits under the Medicaid program.

Your SSI benefits may be reduced under the following conditions;

You have unearned income of over $20.00 a month; this income includes Social Security payments, pension, gifts and other unearned money;

You are living in the home of a friend or relative;

You live in a nursing home.

Additionally, an unmarried couple living together may be listed by the Social Security Administration as "holding out as husband and wife." When this happens, and both persons are receiving SSI, their checks will be reduced, if necessary, so that the two checks together will equal the amount that a couple would receive.

You can call the Social Security Administration’s toll-free number, 1-800-772-1213 and complete an application over the phone, or go to your local Social Security office. If you file an application at a Social Security office, a Social Security representative will assist you with your application. Other agencies such as your Area Agency on Aging may be able to assist you in applying for SSI. Do not delay filing an application if you think you are eligible, because SSI can only be paid from the date of the application.

You should receive a decision from Social Security within 60 days of your application.

If you are denied SSI, you may appeal and you may be represented by a person of your choice at any step in the appeals process. Your representative does not necessarily have to be an attorney. You and your representative will receive notices of all decisions on your claim.

The first step in the appeals process is called the reconsideration. You must ask for the reconsideration within 60 days of the date you receive notice of the initial decision. Do not delay appealing because the process takes a long time. If you have been receiving benefits and you receive notice that your benefits are being reduced or terminated, you must make the request within 10 days so your benefits will continue during the appeal.  A Social Security representative will help with your request. If you are not satisfied with the result of the reconsideration, you may appeal again and ask for a hearing before an Administrative Law judge. Many decisions are reversed after the hearing. You must request the hearing within 60 days of the date you receive notice of the reconsideration decision. Again, you should appeal immediately. Further appeals of the Administrative Law judge’s decision are to the Appeals Council and to federal court. You may want to contact the local Area Agency on Aging or Legal Aid office for assistance with your appeal or questions about SSI.

It is not uncommon for SSI recipients to receive a notice from the Social Security Administration that they have been overpaid. Do not panic if you receive such a notice. You may not have to repay the money or you may be able to repay as little as $10 a month. You have the right to appeal if you do not believe you were overpaid. If you appeal within 30 days of the date on your overpayment notice, your benefits will continue during the appeal. Even if you did receive the overpayment, you may not have to pay it back if you were without fault in causing the overpayment and you are financially unable to pay it back. You must file a request for waiver of the overpayment with Social Security if you feel the overpayment was not your fault. Your local Legal Aid office may be able to help you get a waiver. Social Security may withhold as little as $10 per month from you checks even if you were at fault. You must talk to a Social Security representative about this.

For many individuals, pension plans provide an important supplement to savings and Social Security benefits and thus serve as a vital part of retirement income. Consequently, learning about pension plans and how they operate may prove to be a valuable safeguard before and at retirement.

A pension plan allows certain workers to defer compensation in order to earn benefits which are received upon retirement. While law does not require employers to provide pensions, approximately half of all private employers and most government agencies offer some type of pension plan that pays benefits to those retired persons who meet certain eligibility requirements.

A worker must meet eligibility requirements before he or she can participate in a pension plan. Under the Employee Retirement Income Security Act of 1974 (ERISA), an employee must (with some exceptions) be allowed to begin participation in his employer’s pension plan if he or she is 21 years old or older and has worked for that employer for one year or more. ERISA defines a "year" as a 12 month period in which the worker has worked at least 1,000 hours.

Once an employee becomes eligible to participate in the pension plan, the worker begins earning pension credits which serve as the basis upon which pension benefits are awarded.

The rules of the pension plan will specify how many years of work are required for an employee to become vested. To be "vested" means that you have a legal right to

collect the pension when you retire. Usually, it takes between five and seven years of service with your employer to become fully vested. A vested employee does not lose the right to receive pension benefits even if he or she switches jobs, is fired for misconduct, or has a break in service.

Generally, there are two types of pension plans: defined benefit plans and defined contribution plans.

A defined benefit plan specifies how much in benefits the plan will "pay out" to a retiree. It is the most common type of plan and gives a retired worker a fixed monthly amount as described in the plan.

A defined contribution plan specifies how much money the employer, employee, or both will "pay in" to the plan each year for the employee. With this plan, your contributions are fixed but your benefits may vary according to your contributions and what those contributions have earned over the years. There are several types of defined contribution plans including the following: 

Profit-sharing plans:

employer contributes a portion of each year’s profit to the plan; 

Employee stock ownership plans:

employer’s contribution is made in the form of company stock; 

401k plans:

employee may elect to defer a portion of his or her income and place the money in an individual pension account. The employer may also contribute to the employee’s individual account.

In 1974, the Employees Retirement Income Security Act (ERISA) was enacted to increase protection for workers’ pension plans. ERISA sets minimum standards for pension plans, and guarantees that pension rights cannot be unfairly denied or taken from the worker. If you work for a private employer that offers a retirement plan, ERISA requires that pension plan rules be in writing in the Summary Plan Description (SPD). The summary should include the following:

who is eligible to participate;

how benefits are determined;

the age at which you can start receiving benefits;

who administers the plan;

claims procedures.

You have the right to receive this information from the plan office within 30 days of your request for it.  In addition to your right to the SPD, you are entitled to receive a statement of your "personal benefit account" which explains how many benefits you have and what benefits you have vested. To be "vested" means that you have a legal right to collect the pension when your retire. Usually, it takes between five and seven years of service with your employer to become fully vested. So, if you leave your place of employment after you are fully vested, all of your benefits are still yours. If, however, you leave before becoming fully vested, you lose the unvested portion of your pension benefits.

Under ERISA, employers are prohibited from discharging an employee for the purpose of preventing the employee from receiving a pension. If this happens to you, you have the right to file suit in federal court. You will have to prove that the motivating factor for the discharge was the employer’s intention to prevent payment of your pension benefits. You could potentially recover lost wages and benefits, plus attorneys’ fees.

A break in service (time away from work) may have the effect of canceling pension credits earned prior to the "break." Therefore, it is important that you learn and understand the break in service rule of your pension plan. Under ERISA, an interruption in employment cannot count as a break in service unless the worker has worked less than 500 hours during the year. If a break in service occurs, the worker loses previously earned credits only if the number of consecutive years of break is as great or greater than the number of years of credited work prior to the break. Fully vested benefits are not lost by any break in service. 

For workers who retire after January 1, 1976, most pension plans must provide for a "joint and survivor annuity." This means that the employee can select to have higher benefits that stop at his or her death or a lesser benefit that continues for as long as either the worker or his/her spouse is alive. The amount paid to the surviving spouse can be as low as one-half of the amount the couple received while both were living.

The Retirement Equity Act of 1984 (REA) contains several provisions affecting the rights of homemakers, widows, divorced women and working wives to receive private pension benefits after their spouse’s death. (Note: REA is sex neutral and can help men as well.)

The REA requires that both spouses give written consent in a notarized form before survivor’s benefits can be waived. 

Under ERISA, a worker is protected from loss of benefits due to the employer’s going out of business, acquisition of the worker’s company by a new employer, or amendment or termination of the pension plan. Additionally, ERISA requires the trustees of the pension plan to do the following:

discharge their duties solely in the interest of the pension plan beneficiaries (employees);

act carefully, skillfully, prudently, and diligently in administering the pension plan;

diversify the pension trust fund investments to avoid large losses;

operate the pension plan in accordance with the plan rules.

The Federal Pension Benefit Guaranty Corporation (PBGC) guarantees payment of

vested retirement benefits under most defined benefits plans in certain situations,

such as a company’s bankruptcy. Benefits above a set level are not insured.

(Note: Defined contribution plans do not get this protection.)

If your pension application is denied, you have the right to be notified in writing of the specific reasons for the denial. You also have the right to a full review of the denial by the trustees. If you feel you have been wrongfully denied pension benefits, you should promptly seek legal assistance to determine whether an appeal is in order.

Issued subject to a review of eligibility, numerous benefits are offered by the federal government to qualified veterans. These benefits include medical and dental care, compensation for service-connected disabilities, pensions, treatment for alcoholism and drug addiction, home and education loans, life insurance if retained upon discharge from active duty, and limited burial benefits. Medical care is also available on a priority basis to veterans with nonservice-connected disabilities. Additionally, medicines and hospital care may be available, subject to a means test which considers financial and insurance status, on a priority basis to veterans with nonservice-connected disabilities.

To be eligible for service-connected pension benefits, the veteran must have been

disabled by injury or disease incurred in or aggravated by active service in the line

of duty. The disability can be the result of injury, disease or the result of Veterans Administration (VA) health care. The amount of disability compensation is based

on the degree to which the veteran is disabled by the service-connected condition.

The minimum rating to receive compensation is 10 percent disabled.

Veterans may be eligible for nonservice-connected pension benefits if they meet the following eligibility criteria:

Veteran is permanently and totally disabled so that gainful employment is impossible;

Veteran has served at least one day during a period of war; and

Veteran meets the prescribed income and net worth limitations.

Dependents of a disabled veteran may also be eligible for benefits. A veteran’s spouse, widow or widower, child, and dependent parents may be able to get medical care, education benefits, home loans, pensions, and death benefits. Additionally, spouses and parents of veterans may get an allowance for nursing home expenses or for the expenses of a caregiver if the relative is helpless.

Your Social Security Disability Insurance (SSDI) or Retirement Benefits will not be reduced if you receive service connected VA benefits. However, if you receive Supplemental Security Income (SSI), your VA benefits will be considered income. Therefore, in order to avoid overpayment, be sure to report all VA income to SSA if you receive SSI.

If you receive a non-service-connected pension, you must report all income and changes in income to the VA. A pension is reduced by receipt of SSDI or Social Security, but it is not reduced by SSI.

To apply for benefits, contact your local office of the Department of Veteran Affairs by calling 1-800-827-1000.

Should a veteran disagree with a USDVA decision regarding the application for benefits, the decision can be appealed to the Court of Veterans Appeals. Appellate assistance may be obtained from a regional office Department of Veteran Affairs. An attorney may assist with an appeal, but federal law restricts attorneys’ fees for such representation to ten dollars. If legal assistance is needed and cannot be readily found, a local legal services office or a lawyer referral service might be helpful. Various independent veterans’ organizations such as the American Legion, Veterans of Foreign Wars, and the Vietnam Veterans of America may also be of assistance in the preparation of a claim application or with an appellate review.

With food costs rising ever higher, millions of older Americans on fixed incomes have difficulty obtaining food "basics" necessary for a proper diet. If you meet the income guidelines, the Food Stamp Program may be able to help you stretch your food budget.

As the name suggests, the Food Stamp Program, administered by the Federal Government, provides coupons redeemable for food, as well as plants and seed to grow food. The Food Stamp Program explicitly excludes by regulation such non-food items as alcoholic beverages, pet food, vitamins, medicines, tobacco and cigarettes

Many think that the Food Stamp Program is only designed to help the desperately poor. This is not true. Households may earn moderate amounts of income per month and still be eligible for food stamps. Recipients of food stamps also may own a car, a home of any value, as well as income-producing property, subject to the restriction of the law.

Individual recipients can possess up to $2,000 in resources, and households with at least one member who is 60 or older may have resources valued to $3,000 or less (personal belongings and household items are not considered "resources"). Limits are not set on resources in households whose members all receive either public assistance, such as Aid for Dependent Children (ADC) or Supplemental Security Income (SSI). Such households are eligible for food stamps without other limitations applying. However, there are limitations for those individuals who receive ADC or SSI but live with other members of the household who do not receive such assistance. ADC or SSI recipients in such "mixed households" are granted exemption of resources through a means test.

To apply for food stamps, you must contact your local food stamp office. To find out where that office is, you can call your local Area Agency on Aging. If your household has little or no money and needs help right away, let the food stamp office know. You may be eligible under the "expedited service" rules to receive food stamps within five days of the application date if you are classified as homeless or as a member of a low-income family.

After you have turned in your application, a worker will hold a confidential interview with you or another member of your household at the DSS office. If no one in your household can go, an adult friend or relative who knows your circumstances may go for you. If you are 65 or older, disabled or suffer other hardships, and cannot go to the food stamp office, let the office know. A worker will arrange to interview you at home or by telephone

You must reside in the area and be a U.S. citizen or lawfully admitted alien, and register for work unless you are over 60 or meet other exemptions. All households may have up to $2,000 worth of resources such as cash, checking and savings accounts, stocks and bonds, and land and buildings not used to produce income. Households with at least one member who is 60 or older may have up to $3,000. Bring proof of countable assets to the interview to expedite your case. In most cases, your house and surrounding lot, one car, household goods and personal belongings, and life insurance policies will not be counted as resources. You must provide proof of your Social Security number.

            a person or group of persons living alone, or

a person or group of persons living with others but usually purchasing and preparing meals separately, or

a group of individuals who live together and customarily purchase food and prepare meals together.

Only households with net monthly incomes below the allowable limits may qualify for food stamps. These limits go up with increases in the size of the family and are adjusted twice yearly to reflect changes in the cost of living. Persons who are caretakers of minor children may apply for and receive food stamps as separate households and share the same residence. Persons with earned income must file monthly report forms with the local Food Stamp office. All persons, except for those who are disabled or elderly, will have their allotted food stamps determined retrospectively. For example, a person’s income and expenses for March will determine the allotment for May. You may prove your income by recent pay stubs, information given by your employer, pension information, and benefit letters from the Social Security or Veterans Administration. Check with your local Food Stamp office to determine current allowable income for your household.

After adding income of all members of the household, the worker can subtract certain deductions such as standard deduction for every household ($134), a 20 percent deduction for earned income, dependent care (including care for disabled adults), and high housing costs. Proof of these expenses may include bills or records of payment of rent or mortgage, house insurance, property taxes, electricity, gas, oil, sewerage, telephone, and water.

If you are eligible for food stamps, you should receive your stamps no later than 30 days from the date you first applied. If you do not qualify, a written notice will explain why. If your local office requires you to pick up your stamps but you cannot, arrange to have someone that you have named pick them up for you.

Be sure to report any changes in your household’s circumstances by calling your case worker or sending in the form provided by the food stamp office. If you receive extra food stamps because you have not reported a change, you will owe the Food Stamp Program the value of these stamps. 

If you think that your application has been wrongly denied or that you have not received the right amount of food stamps, you should tell the food stamp office right away. If they disagree with you, you have the right to request a review by a hearing officer.

You may have a friend or relative attend the hearing with you, or you may wish to obtain the services of a legal aid or private attorney.

In some cases, you can continue to receive your regular allotment of food stamps while you await the hearing officer’s decision. If the hearing officer decides in your favor, you will receive the correct amount of food stamps. If the decision is in favor of the food stamp office, you will be asked to repay the value of any stamps you were not entitled to receive.

Certain types of income are taxed, while others are not. For example, gifts and interest earned on certain municipal bonds are not taxed. Salary and wages, payments from a pension plan, and investment income are forms of income which are taxed. If your income exceeds a certain level, your Social Security payments may be taxable for federal income tax purposes. Included in the instructions for the IRS Form 1040 is a worksheet that will help you figure whether any part of your Social Security payments is taxable.

When you file an income tax return, you are allowed a personal exemption, unless you are eligible to be claimed as a dependent by someone else. In some instances, you are allowed additional exemptions if you provide primary support for a dependent (such as a parent, child, or grandchild).

You may be eligible for a 15 percent tax credit if your income does not exceed the specified level, and:

you were 65 years of age before the close of the tax year; or

you are permanently and totally disabled.

This credit will reduce the tax you owe, but it will not result in a refund. Contact your tax advisor or local IRS office if you think you may be eligible for the federal tax credit.

You may be eligible for the Earned Income Credit if you are working and you have a child or grandchild who lives with you. The tax credit is available to anyone who maintains a home for himself and a child who is either under the age of 19, a student, or disabled. The credit is available only if you have less than the specified level of income. Earned income for this tax credit includes salaries, tips, and earnings from self-employment. Pension and annuity payments are not included. This tax credit may reduce the tax you have to pay and may even result in a refund.

Taxpayers Who are Blind or Older Than 65 Years

For taxpayers who elect not to itemize their deductions, an additional standard deduction is available for individuals who are blind or over the age of 65. The additional standard deduction is available in addition to the basic standard deduction available to all non-itemizing taxpayers. Individuals who are both blind and over the age of 65 may claim two additional standard deductions. While the amount of the additional standard deduction generally changes each tax year, the additional standard deduction for tax year 1997 was $1000 for unmarried individuals and $800 for married taxpayers.

You may be eligible to claim the additional standard deduction for blindness if either:

Your central visual acuity doesn’t exceed 20/200 in your better eye with correcting lenses; or

Your field of vision is limited such that your visual field extends no more than a 20 degree angle.

You may be required to submit a statement from your physician certifying the degree of your visual impairment. Consult your tax preparer for further information about qualifying for the additional standard deduction for blindness.

If you itemize your deductions on your tax return, you should consider your medical and dental expenses. Medical expenses are deductible if they account for more than 7.5 percent of your adjusted gross income. Deductible medical expenses include the following:

doctor and hospital bills

health insurance costs (Note: Medicare Part B premiums are deductible; the basic cost of Medicare Part A is not deductible unless voluntarily paid by the taxpayer for coverage.)

prescription medicines and drugs

hearing devices and glasses

nursing help

equipment (such as elevators for the physically disabled)

transportation costs to and from medical care

long term care and nursing home expenses, if the home is necessary for medical care.

For more information, contact your local IRS office or your tax advisor.

Sale of Principal Residence

The Taxpayer Relief Act of 1997 repealed the one-time $125,000 exclusion of income from the sale of a principal residence by taxpayers age 55 or over. The Taxpayer Relief Act replaces this provision with an exclusion of up to $250,000 (or $500,000, in the case of married taxpayers filing a joint return) of income realized on sale or exchange of a principal residence by taxpayer regardless of age.

To be eligible for the exclusion, a taxpayer must have owned the residence and occupied it as a principal residence for at least two years before the date of sale. The exclusion is not a one-time exclusion, but is generally available no more frequently than once every two years.

Medical Savings Account (MSA)

The Balanced Budget Act of 1997 creates a new type of Medical Savings Account (MSA) for individuals on Medicare. For tax years beginning after December 31, 1998, Congress has authorized a four-year pilot program that permits eligible seniors to establish MSAs called "MedicarePlus Choice MSAs." These MSAs must be used in conjunction with a MedicarePlus Choice MSA health plan, which requires a certain deductible to be satisfied before a senior citizen’s medical expenses are reimbursed. The Secretary of Health and Human Services will make tax-free contributions to the MSA from Medicare trust funds equal to the deductible amount under the account owner’s MedicarePlus Choice MSA health plan coverage. The account owner can use the MSA to pay for qualifying medical expenses, with no tax imposed on withdrawals for such purposes.

MedicarePlus Choice MSAs are a test program and will be available to the first 390,000 eligible seniors who enroll. The pilot program ends December 31, 2002.

Long Term Capital Gains

The top tax on long term capital gain is reduced by the Taxpayer Relief Act of 1997 from 28 percent to 20 percent (to 10 percent for taxpayers in the 15 percent bracket). There are holding period rules, so consult your tax advisor.

Estate and Gift Tax Exemption

Under the Taxpayer Relief Act of 1997 the estate and gift tax exemption excludes up to $625,000 of a decedent’s estate for decedents dying, or gifts made, in 1998, $650,000 in 1999 and $675,000 in 2000 and 2001. More increases will occur in later years, with the exemption topping out at $1 million dollars in 2006.

Other Important Tax Changes

Other important changes in the federal tax structure will affect individuals, families, businesses, and investors. Consult your tax advisor.

Medicaid is a cooperative federal-state program which provides health care services to the poor of all ages. The program is administered by state agencies, and thus the regulations governing Medicaid vary from state to state. At the federal level, Medicaid is administered by the Health Care Financing Administration (HCFA).

Medicare and Medicaid are frequently mistaken for one another, but the programs serve two different populations. Note the following differences between Medicaid and Medicare: 

Medicaid was designed to meet the medical needs of the poor, and therefore, the elderly must often deplete a major part of their assets before they are eligible for Medicaid benefits.

For older persons, there are three primary coverage groups under Medicaid: 1) Special Low-Income Medicare Beneficiaries (SLMB), for whom Medicaid pays the monthly Medicare premium; 2) Qualified Medicare Beneficiaries (QMB), for whom Medicaid pays Medicare coinsurance, deductibles, and premium costs; and 3) those individuals who have been found eligible for the full range of Medicaid services. The range of services may vary from state to state, but generally includes the following:

Medicare Part B premiums, deductibles, and coinsurance;

Inpatient hospital services with limitations and deductibles;

Outpatient hospital and rural health clinic services;

Nursing home care;

Physician services;

Transportation;

Long-term care alternatives, such as home personal services;

X-ray and laboratory services;

Home health care services;

Clinic services;

Prescription drugs;

Medical supplies and equipment in limited circumstances;

Physical therapy and related services; and

Emergency hospital services.

Only identified groups of individuals are eligible for Medicaid assistance. You must be age 65 or greater, disabled by Social Security’s standards of disability, or a member of a family with children that is medically indigent. If you are a recipient of Supplemental Security Income or an Auxiliary Grant, you may be eligible for Medicaid. Your eligibility also depends on the amount of your available income and assets.

In determining Medicaid eligibility, resources are categorized as either countable or non-countable. Countable assets are used to determine Medicaid eligibility and include those assets for which there is a meaningful possibility that they could be sold or otherwise converted into cash. Among the assets that count are bank accounts, stocks, Individual Retirement Accounts, deeds of trust, or real property other than the home. Non-countable assets are those assets which are not counted in determining the resources available to a person for purposes of qualifying for Medicaid treatment. Non-countable assets include the following:

your home;

personal effects, including clothing, jewelry, photographs;

household furnishings, such as furniture, paintings, appliances and electronics, which are exempt only while being used in the applicant’s home;

one automobile;

property essential to the institutionalized person’s self-support;

some life insurance policies;

burial funds and cemetery plots.

When an individual applies for Medicaid, he or she will be asked to disclose any property transfers made within the last 60 months prior to application. Intentional reduction of assets in order to qualify for Medicaid, by putting assets into a trust, giving it away, or otherwise disposing of it without receiving compensation of a like value can cause ineligibility for Medicaid coverage of long-term care services. The penalty period is dependent on the value of the asset transferred, how long ago the transfer occurred, whether compensation was received, and other factors. Therefore, before any transfer of assets is made, consultation with an attorney knowledgeable about Medicaid matters is suggested.

Medicaid is the largest single payer of long-term care services. Many individuals of substantial means eventually spend their money and then seek coverage through the Medicaid program, particularly since there are so few long-term care insurance policies in force. Medicaid covers care in nursing facilities and in community alternatives allowed by waivers to federal rules. It is important to advise a nursing home or home for adults at time of admission planning if you expect to apply for Medicaid within six months of entering, because screening must be done in order to verify that the intended care is medically appropriate.

If you are single and require long-term care, you will most likely be expected to pay a portion of your income toward your cost of care, retaining an amount for personal needs, with Medicaid making up the difference each month. For married people, if a spouse is institutionalized, income assets are treated differently in order to prevent the spouse at home from becoming impoverished.

If you feel you have been unfairly denied Medicaid eligibility, you have the right to appeal the denial. The required timeframe within which you must make your appeal varies from state to state. In making the choice to appeal, you may wish to obtain the advice of legal counsel.

Medicaid rules are very complex, and detailed rules exist for such items as what constitutes countable income and assets, when property transfer is a potential bar to receipt of services, and whose income and resources will be used against what financial standards. For specific guidance, particularly regarding estate planning and long-term care, you may wish to contact an attorney who practices in the area of elder law.

Signed into law in 1965, Medicare is a federal health insurance program for people 65 years of age and older. While it is the primary source of publicly funded health care for the elderly, people with permanent kidney failure and certain younger disabled people are also eligible to receive Medicare benefits. The program is administered by the Health Care Financing Administration (HCFA) which works with the Social Security Administration in enrolling people in Medicare and in collecting Medicare premiums.

Medicare has two parts: (1) Part A, which is hospital insurance and (2) Part B, which is medical insurance. Most people qualify at age 65 and can receive the benefits of Part A. There is no monthly premium for Part A, but there is a monthly premium for Part B benefits. You can enroll in Part A without enrolling in Part B.

To receive any Medicare benefits, you must apply at a local Social Security office. You will not receive benefits unless you apply for them. If you do not enroll within one year of reaching age 65, the premium will be increased by 10 percent and you may only sign up during the first quarter of each subsequent year.

Medicare Part A helps pay for covered services received in a hospital or skilled nursing facility following a hospital stay, or from a home health agency or hospice program.

You are eligible for Part A if:

You are 65 or over or qualify for Social Security retirement benefits, or Railroad Retirement benefits, OR

You are disabled and have been receiving Social Security disability benefits or Railroad Disability benefits for the past 24 months, OR

You are receiving dialysis or need a kidney transplant because of permanent kidney failure, OR

You are age 65 or over and do not meet any of the above requirements, but you pay a Medicare premium.

Inpatient Hospital Care

From the first day through the 60th day in a hospital during each benefit period, Medicare Part A pays for all covered services except the first $760 (in 1997), which is the deductible. From the 61st day through the 90th day, Part A pays for all covered services except a $190 per day copayment. If you are in the hospital for more than 90 days in a benefit period, you can use your "reserve days" to help pay the bill. For a reserve day, Medicare pays all covered costs except for daily coinsurance of $380 (in 1997). You have a lifetime supply of 60 reserve days. So, for days 91 through 150 of a hospital stay, Medicare Part A will cover all but $380 per day. There is no coverage for days 150 to 365 for an inpatient hospital stay.

Skilled Nursing Facility Care

A skilled nursing facility is different from a nursing home. It is a facility that primarily furnishes skilled nursing and rehabilitation services. (Note: Many nursing homes have specialized skilled care units.) Skilled care is to be distinguished from basic personal or custodial care such as assistance in walking, getting in and out of bed, eating, dressing, bathing and taking medicine. Medicare Part A will not pay for custodial care if that is the only kind of care you require.

Medicare Part A helps pay for a skilled nursing facility stay to a maximum of 100 days in each benefit period, but only if you need daily skilled nursing care or rehabilitation services for that long. In each benefit period, Part A pays for all covered services for the first 20 days in a skilled nursing facility. For days 21 through 100, Part A pays for all covered services except for $95 a day (in 1997). You are responsible for all charges beginning with the 101st day.

Home Health Care

Medicare will pay for all medically necessary covered home health services. Medicare pays for visits by a Medicare-approved home health agency. In order to qualify for coverage, you must:

need intermittent skilled nursing care, physical therapy, or speech therapy, be confined to your home, and be under a doctor’s care.

A hospital stay is not needed to qualify for the home health benefit, and you do not have to pay a deductible or coinsurance for home health services.

Hospice Care

Medicare covers the following hospice services:

Physician services

Nursing care

Medical appliances and supplies

      Drugs (for pain and symptom relief)

Short-term inpatient care

Medical social services

Physical therapy, occupational therapy and speech/language pathology services

Dietary and other counseling.

Medicare Part B pays for many medical services and supplies, but most importantly, it provides coverage for your doctor’s bills. The full range of benefits includes:

Physician’s services

Outpatient hospital services

X-rays and laboratory tests

Certain ambulance services

Durable medical equipment, such as wheelchairs and hospital beds, used at home

Services of certain specially qualified practitioners who are not physicians

Physical and occupational therapy

Speech/language pathology services

Partial hospitalization for mental health care

Mammograms and Pap smears

Home health care if you do not have Part A

Part B generally does not cover outpatient prescription drugs, although there are some exceptions.

Medicare Part B costs $43.80 per month in 1997. After a $100 deductible is met, Medicare pays 80 percent of the Medicare-approved covered services. You are responsible for the remaining 20 percent, which is called coinsurance.

Because Medicare has significant gaps in coverage, Medicare beneficiaries may choose to purchase a supplemental health insurance policy. Such policies may be purchased to cover items like prescription drugs, the Medicare Part B coinsurance, and custodial nursing home care. There is a variety of private supplemental insurance policies available to help pay health care expenses. You may choose from the following types of coverage:

Medigap Policies: provide coverage for some services not covered by Medicare;

Managed Care Plans: plans which allow you to purchase health care services for fixed charges;

Long Term Care Insurance: policies which pay for nursing home or home care;

Continuation or conversion of an employer-provided or other policy you have when you reach 65;

Hospital indemnity policies: policies which pay for each day of inpatient hospital services; and

Specified disease policies: policies which pay only when you need treatment for the insured disease.

Medigap insurance is specifically designed to "fill in the gaps" of Medicare coverage.

In order to make it easier for the consumer to choose the appropriate Medigap policy,

the National Association of Insurance Commissioners (NAIC) devised and promulgated ten standard Medigap packages of benefits which are labeled "A" through "J". Each package incorporates different benefits. (See chart, page 26) All states (except Minnesota, Massachusetts, and Wisconsin) limit the number of different Medigap policies that can be sold to no more than the 10 standard Medigap plans.

Insurers are prohibited from checking on the health of Medicare applicants 65 or older for six months after they sign up for Medicare Part B. No company can require a holder of a Medigap policy to switch to one of the new plans and companies are now prohibited from selling a new policy to a person who already has one, unless it is to replace an existing plan.

Plan A is known as the Basic Plan, and must be included in every Medigap policy now offered for sale. Plan A includes all coinsurance for a hospital stay for the 61st to the 150th day, all charges for an extra 365 days in the hospital and also takes care of the deductible under Part A for the first three pints of blood. Medicare Part B pays 80 percent of the physician’s allowable charges. For those who have this coverage, Plan A also pays the remaining 20 percent.

All plans except Plan A cover up to 100 days in a skilled nursing facility, as well as the Medicare Part A deductible. All plans except A and B cover emergency care in foreign countries. The Part B deductible is covered by Plans C, F, and J. Plans F, I, and J cover 100 percent of Part B excess charges over approved charges (for physicians who do not accept assignment) and Plan G pays 80 percent of these. Plans D, G, I, and J pay for at-home care after a hospital stay. Preventive medical care is covered by Plans E and J, and prescription drugs are covered by Plans H, I, and J, with a $250 deductible, a 50 percent coinsurance and limit of $3,000 for Plans I and J and $1,250 for Plan H.

Most companies do not offer all nine "add-ons" (B-J). Companies do not charge the same premiums for the same coverage. Some companies are doing individual underwriting of the risk. It is important to comparison shop and make sure you understand what you do not get from Medicare and what you do get from the Medigap policy you are considering.

Ten Standard Medicare Supplement Plans

One of the most difficult decisions a retiree must make is choosing a health care plan. There are numerous, often confusing, health care plan options to consider. These options range from traditional fee-for-service plans to the rapidly growing managed care plans.

Under this traditional health care plan, the individual can choose any licensed physician and use the services of any hospital, health care provider or facility. Generally, a fee is paid each time a service is used. For Medicare beneficiaries, Medicare pays a share of the hospital, doctor, and other health care expenses. The beneficiary is responsible for certain deductibles, coinsurance payments, all permissible charges in excess of Medicare’s approved amounts, and all services not covered by Medicare. Some of these out-of-pocket expenses may be covered by supplemental "Medigap" insurance.

The term "managed care" is used to describe health care systems that integrate the financing and delivery of appropriate health care services to those individuals covered by the plan. The goal of managed care is to decrease the costs of health care without sacrificing the quality of care. Managed care systems may pursue this goal through the following mechanisms:

Establishing a limited network of providers who agree to fixed payments based on the number of members enrolled in the plan. This arrangement is called

                  capitation and is designed to encourage providers to care for patients

                  efficiently and to promote healthy behavior so expensive treatment is less

                  often necessary.

Requiring enrollees to consult a primary care physician who coordinates care and makes any necessary referrals to specialists.

Using a "utilization review" process in which a group of health care professionals determine the appropriateness of care.

Health Maintenance Organization (HMO)

A Health Maintenance Organization (HMO) is a type of managed care system which provides comprehensive medical care to its members on a pre-paid basis. Through its network of contracted family physicians, specialists, hospitals and other health care providers, an HMO manages the delivery of health care for its members. The beneficiary usually must obtain health services from the professionals and facilities that are part of

the HMO. These services may be provided at one or more centrally located health facilities or in the private practice offices of the doctors and other health care

professionals affiliated with the plan. While many HMO plans do not charge a monthly premium, some plans may require enrollees to pay a monthly premium which typically ranges from $50 to $75 per month. Additionally, HMO plans may require a small copayment for each appointment and drug prescription. Usually, there are no additional costs to the enrollee no matter how many times he or she visits the doctor, is hospitalized, or uses other covered services.

Medicare Risk HMOs: Under these plans, you must receive all covered care through the plan or through referral by the plan. If you go outside the plan for service, neither the plan nor Medicare will pay for those services. You will be responsible for paying for the entire bill out of your own pocket. There are exceptions to this restriction in the event that you need emergency or urgent care.

Medicare Cost HMOs: Under these plans, you have more flexibility to visit health care providers outside of the plan. If you go to providers affiliated with the plan, you pay only the applicable copayments. If you go to providers outside of the plan, Medicare will pay for its share of the approved charges, but the plan probably will not pay its share. You will have to pay for Medicare’s coinsurance, deductibles, and other permissible charges, just as if you were receiving care under the fee-for-service system. These plans are good choices for those who travel frequently or live outside the plan’s service area during part of the year.

Preferred Provider Organizations (PPOs): Under these plans, individuals select a primary care provider (PCP) when they enroll and are encouraged through benefit design to use this PCP as the first stop for all care. The PPO establishes a contracted fee with physicians and hospitals that is usually discounted from regular charges. Enrollees have the flexibility to select non-network providers, but they will not receive the PPO discounted rates for service.

Point of Service Plans: The point of service plan is an option under Medicare Risk HMOs. Under these plans, the enrollee is permitted to receive certain services outside the plan’s provider network and the plan will pay a percentage of the charges. The enrollee is expected to pay at least 20 percent of the bill in return for this flexibility.

In making a decision to enroll in a managed care plan, you may want to consider the following advantages and disadvantages:

Advantages

Provision of increased preventive care because of better preventive benefit coverage and increased screening and early treatment.

Increased quality of care due to coordination of services.

Decrease in out-of-pocket expenses (as compared to fee-for-service plans).

Provision of services and items which are not covered at all under traditional fee-for-service Medicare. (For example, most Medicare HMOs provide significant coverage for prescription drugs.)

The need for Medigap insurance to supplement your Medicare coverage will be eliminated.

Disadvantages

Less flexibility to use the services of specialists and less follow-up care (as compared to fee-for-service plans).

Requirement of prior approval by your primary care physician for elective surgery, medical equipment and services provided by specialists.

Lower levels of satisfaction with patient-physician interpersonal relationship.

It can take up to 30 days to disenroll.

A major concern regarding managed care is that HMOs have incentive to refuse authorization of needed care. Because HMOs receive a set monthly fee from Medicare, the HMO could increase its profits by refusing to authorize care.

You should ask the following questions about the HMO you may be considering for enrollment:

How long has the HMO plan been in business?

What has been the turnover rate of the network’s physicians during the past five years?

 What is the average waiting time for appointments?

If I do not like my assigned physician, can I change doctors?

What percentage of the network’s doctors are board certified?

What is the plan’s annual disenrollment rate?

What percentage of enrolled patients have filed appeals in the last year?

What percentage of appeals were ruled in favor of the patient?

Additionally, get information about the health care providers and facilities affiliated with the plan. Note whether the plan’s providers are in a location convenient to you and whether transportation is available at all hours to get you to them.

You can obtain the names of managed care plans in your area by calling your state insurance counseling office or by calling Medicare at 1-800-638-6833.

Most plans have continuous enrollment, so you can join at anytime. All plans that have contracted with Medicare must have an advertised open enrollment period of at least 30 days once a year. 

Long-term care coverage is an insurance product which first appeared in the early 1980s. Different policies are available to cover custodial care in the nursing home, home care, and care in a skilled nursing facility if Medicare benefits are unavailable. When shopping for long term care insurance, it is very important to carefully examine and compare policies in order to avoid duplicating any existing coverage provided by other insurance policies.

Medicare does not pay for custodial long-term care and will only pay limited benefits for home health and for skilled nursing home care as a transitional phase between the hospital and ultimate return to the home. Some Medicare supplement insurance policies (Medigap) will pay for limited skilled nursing home care. While nearly half of Americans who turn 65 will eventually enter a nursing home, many will have nursing home stays of less than 100 days. Many others will have to pay someone to help them continue living in their home. Long-term care insurance can provide the means to pay for required care not covered by Medicare or Medigap.

You should consult your tax advisor about a recently passed federal health insurance law that provides tax incentives to encourage people to purchase long-term care insurance. As of 1997, the cost of long-term care insurance may be deductible from federal income tax.

As in the case of all applications for insurance, it is the responsibility of the prospective policyholder and not the agent to make sure that the application is accurately completed. Failure to reveal what may appear at the moment to be an insignificant medical problem could possibly void the policy.

Be sure that policy coverage is adequate. Some policies only cover licensed nursing homes. You should be sure that your policy covers skilled, intermediate and custodial care. If another level of care such as home health care or adult day care is desired in place of or in addition to other types of care, make sure the policy provides for it.

Watch the restrictions, many of which are common. Recent studies indicate that if prior hospitalization is required in order to activate the policy, there is more than a 50 percent chance of never collecting any money from the insurance company. If only skilled care will be reimbursed, either wholly or partially, there is a 45 percent chance of noncollection. Then there are waiting or elimination periods. If such periods are 90 days or more, the same studies indicate that there is a 30 to 40 percent chance of not collecting.

Be sure that the benefits are in line with local nursing home and home care costs. Currently, the cost of nursing home care is $30,000 annually across the United States, and in major metropolitan areas, the average escalates to $60,000. The policy should also provide in some manner for inflation protection, even if the premium is raised proportionately. The maximum dollar benefit under the policy should be scrutinized.

Obviously, lifetime policy duration is advisable. Renewability should be guaranteed. Make sure that preexisting conditions are covered and that the type of facility you would want to enter is covered. For example, retirement communities often do not qualify under many policies. Normally, at a minimum, all levels of care in a licensed Nursing Facility, Home Care and Respite Care are what the average person considering this type of insurance wants covered. Some policies provide for a return of premium in the event of death prior to a given age, such as 70. Be sure that there is no exclusion for Alzheimer’s Disease and other organic brain disorders (cognitive impairment). As a matter of fact, check all exclusions carefully.

The National Association of Insurance Commissioners in December 1990 issued guidelines for the various states in connection with the regulation of long-term care insurance. However, there is no substitute for careful investigation to make sure that the policy you acquire will meet your needs when the time comes. Companies offering long-term care insurance should have toll free numbers where you can contact specialists in the area at the home office, and it is recommended that you take advantage of this service. The agent can give you the number.

To be eligible for benefits, the insured is normally required to need assistance in at least two and perhaps three of what are known as ADLs --Activities of Daily Living. ADLs include eating, bathing, dressing, transferring positions, and toileting. If the policy requires more than three, it should be avoided. Qualification is usually determined independently or by the insurer.

In conclusion, it should be noted that premiums rise very rapidly as the insured gets older, and many policies require medical underwriting. As a result, it is important that long-term care insurance be considered at an early age. At this writing, the cost of a good long-term care insurance policy and a Medigap policy at age 65 are about the same. Each individual must decide for himself or herself whether either, neither or both Medigap and long-term care insurance are appropriate. It is also important to make sure that coverage is not duplicated by Medicare, Medigap or long-term care insurance in case you have one or all of them. For additional information, contact your state’s health insurance counseling program. The following resources are also available to assist you:

Before You Buy: A Guide to Long-term Care Insurance (D12893)

Making Wise Decision for Long-Term Care (D12330)

A Handbook About Care in the Home (D955)

For these three publications, contact:             AARP

                                                                        Fulfillment

                                                                        601 E. Street, N.W.

                                                                        Washington, D. C. 20049

                                                                        (Specify Publication Number)

A Shopper’ s Guide to Long-Term Care Insurance

For this publication, contact:                          National Association of Insurance                                                                                         Commissioners

                                                                        120 W. 12th Street, Suite 1100

                                                                        Kansas City, MO 64105-1925

Alzheimer’s Disease (Alzheimer’s) is a type of dementia. Dementia is the term used to describe a serious decline of intellectual function, including memory, the ability to think and behavior. The primary organ affected by this disease is the brain, specifically the areas involving cognitive function and memory function. Mild memory problems, including difficulty recalling names or retrieving information are seen with normal aging.  Memory may be affected by multiple small strokes, Parkinson’s Disease and a variety of medical illnesses and medications. Recent estimates put the number of Americans suffering from Alzheimer’s at 4 million. The prevalence of this disease rises with age, with approximately 47 percent of individuals affected by age 85.

Alzheimer’s and related dementia have a tremendous impact on the spouse and on the family caregivers (who are often referred to as the "hidden victims" of the disease). Alzheimer’s indeed affects the entire family. It is important that caregivers get support because the stress of caring for someone with Alzheimer’s disease is often mentally and physically draining for caregivers. When the caregivers become ill, they are no longer able to care for the patient, resulting in institutionalization of Alzheimer’s patients.

The onset of Alzheimer’s usually is gradual, beginning with minor memory problems and progressing to significant memory loss. Alzheimer’s may also cause visio-spatial difficulties, poor judgment, personality changes, or other evidence of impaired brain function. In turn, this decline in mental function leads to behavioral and emotional changes, loss of ability to care for oneself, and ultimately death due to physical deterioration. Alzheimer’s affects each individual differently. Therefore, the number and degree of symptoms, as well as the course of the disease, may vary from person to person. Eventually, Alzheimer’s leaves its victims totally unable to care for themselves. Symptoms you may notice in an individual with Alzheimer’s include problems remembering recent events, difficulty in performing familiar tasks, confusion, personality changes, behavior changes, impaired judgment, difficulties in finding words, in finishing thoughts, or in following directions. Be particularly alert for depression, which often occurs early and is hidden or "masked" in Alzheimer’s patients. If it is suspected, seek professional help.

Caregivers for the Alzheimer’s patient will need support and assistance in giving that care. There are many people who can help - family and friends, health care professionals, Alzheimer’s Association Chapter members, and others. Specialized programs and services can make life easier and more enjoyable for the caregiver and the person with Alzheimer’s. For example, individuals with Alzheimer’s may forget or refuse to eat. Meals on Wheels is a helpful program, but someone may have to be at home to accept delivery and supervise the eating. It is important that an individual with Alzheimer’s receives help from people who are trained to help those with Alzheimer’s.

If you suspect that someone you know has Alzheimer’s, it is important to contact your family physician or nearby teaching hospital for a physician referral. A comprehensive evaluation involving physicians, nurses, neurologists, and social workers can assist families in developing comprehensive plans of care for patient and family. Medical professionals can also evaluate the patient for other medical problems that may be

causing or contributing to the dementia. It is important to have one primary care physician. That physician can provide continuing care for the person with Alzheimer’s, and in providing that care, treat other illnesses that arise, prescribe medications, answer questions, and provide caregiver support. When needed, the caregiver may seek a second opinion from a physician specially trained in managing Alzheimer’s disease. A physician may also suggest that you consult a geriatric psychiatrist to help manage the behavior, depression, and personality changes that often accompany the disease. Nurses involved with Alzheimer’s patients or Alzheimer’s support group members can teach family members the ongoing practical care of a person with Alzheimer’s.

A family may also want to consult an attorney experienced in medical assistance law or the local Social Services Agency to advise them on their rights to government financial support through Medicare, Medicaid, Social Security, disability, or veterans benefits.

The job of caring for a person with Alzheimer’s can be overwhelming. It is important that the caregiver take an occasional break, away from hands-on caregiving. Remember that asking for help will allow you to care for your loved one longer. There are several options for the caregiver to have some time away from caregiving. These options provide for care for the Alzheimer’s patient for a few hours, a few days or even on a permanent basis.

If you would like the Alzheimer’s patient to remain in the home, you may contact visiting nurses, home health aids, and paid companions to provide service in the home. These individuals provide services that may include health care, personal care, shopping, cooking, or housework. Make sure that the person providing the home care is familiar with Alzheimer’s so that they can provide special care.

Adult daycare programs provide people with Alzheimer’s several hours a day of structured recreation and mental stimulation. In an adult day care program, people with Alzheimer’s can interact with others, exercise, listen to music and engage in other activities. These activities can give them an opportunity to enjoy life and can be extremely beneficial to the patient and the family.

Certain hospitals, nursing homes and residential facilities offer short-term stays for the Alzheimer’s patient. This service, often called "Respite Care" provides full-time care of the Alzheimer’s patient within the facility, for a period of days or weeks. When the Alzheimer’s patient is in Respite Care, the caregiver has a chance to take a vacation, or just to get some relief from the stress of caregiving.

As Alzheimer’s disease advances and symptoms worsen, the family of the Alzheimer’s patient may have to decide to make other living arrangements for the victim. Placing a family member in a nursing home or other long-term facility for any reason is a difficult decision and yet, at some point, it may be the most responsible decision that can be made. Some nursing homes specialize in the care of persons with Alzheimer’s, offering so-called Alzheimer’s or Special Care Units. A word of caution: be certain the program that you choose is in fact one of substance with high-quality personnel. It may be beneficial for you to actually visit the program and see it in action. If a person with Alzheimer’s is terminally ill, he or she may be accepted in a hospice program.

Alzheimer’s affects families physically, emotionally, financially and socially. Many families find that other problems become magnified under the stress of caregiving and that they need help, support, or advice, in areas not directly related to the illness. Although you may receive support from families, neighbors, and clergy, it may be advisable to seek outside assistance. The Alzheimer’s Association often receives phone calls from families of Alzheimer’s patients who have questions about what can be done to protect the future security of the patient and/or his family. The Alzheimer’s Association has chapter and peer support groups in cities across the country, and provides the support families need. In addition to providing support and guidance, many chapters offer educational literature, consumer information and workshops for caregivers and professionals. There is also a Wanders Alert program which sets up a file with photographs of the Alzheimer’s patient, which can be of assistance if the patient becomes lost. Call your local Alzheimer’s Association chapter for more information.

As soon as Alzheimer’s is suspected, the family and the patient should meet with a knowledgeable attorney to plan for legal and financial complications. This is important because during the early stages of the disease, the Alzheimer’s patient may be capable of participating in legal and financial planning to protect the future management of his or her life and assets. When meeting for a legal consultation, it may be helpful to have the following documents: executed wills and trusts, prior tax returns, health and life insurance policies, pension information, deeds, mortgages, bank accounts and information about other financial investments. Below are several legal issues which should be considered. 

What Is a Nursing Home?

A nursing home is a long-term care facility designed for people who need less care than a hospital provides, but for whom adequate services are not reasonably available in the home or community. It is designed for those needing long-term nursing or convalescent care due to aging or prolonged illness or injury. This care might include, for example, administering medicines, preparing special diets, rendering treatments prescribed by a doctor and total nursing care. Generally, the services offered by nursing homes include medical and nursing care, meals, laundry, and housekeeping. Additionally, quality facilities offer dietary, pharmacy, recreational and social services, plus occupational therapy, physical therapy, and speech therapy.

Many people are involved in providing services to the residents of nursing homes. Some of these people include the following:

Administrative Staff: Includes an Administrator, Director of Admissions, Director of Personnel, and Finance Director; these people are responsible for the overall operation of the nursing home.

Medical Director: Is the physician responsible for overseeing the delivery of medical care to all residents in the nursing home.

Nursing Staff: Includes a Director of Nursing (who is usually a registered nurse), the Assistant Director of Nursing, Registered Nurses (RNs), Licensed Practical Nurses (LPNs), and nursing assistants; generally, the Director of Nursing and Assistant Director of Nursing supervise the work of the nursing staff. The registered nurses and licensed practical nurses provide medical treatments, administer medications, and provide written documentation of medical care. The nursing assistants provide custodial care to patients (for example, bathing, feeding, and toileting.)

Therapists: Includes physical, occupational, recreational, and speech therapists who help residents maintain their physical and functional status.

Social Services Staff: Includes social workers who help residents cope with emotional and psychological issues.

Activities Director: Provides therapeutic recreational programs which are designed to meet the assessed needs of the nursing home residents.

Dietary Staff: Includes a food service director and dietary assistants. The food service director manages the meals program, guaranteeing that dietary requirements are met for the nursing home residents. Dietary assistants are involved in the preparation and delivery of meals.

Medicare

You can receive financial assistance from Medicare for a certain number of days of care in a skilled nursing facility per spell of illness if you qualify for Medicare benefits. This is provided under Medicare hospital insurance (Part A). There are deductibles and coinsurance amounts that must be paid and there may be conditions for qualification. Generally, Medicare does not cover many nursing home expenses.

Medicaid

Medicaid, the program which is jointly administered by the federal government and the state, also pays for care in most nursing home facilities. A physician must certify the level of care needed, and you must be eligible for Medicaid benefits. Make sure that the nursing home will retain a resident whose funding source may switch from private or Medicare funds to Medicaid funds.

Veterans Benefits

The Veterans Administration may provide assistance for nursing home expenses to some veterans. Assistance may also be available to some children and surviving spouses of veterans. In order to receive these benefits, however, you must choose a nursing home that is under contract with the Veterans Administration. Contact your local VA office for more information.

Private Health Insurance

Some private health insurance plans provide for limited nursing home coverage. If you are covered by private insurance policies, you should talk with the carrier or your insurance agent to find out specifically what nursing home care is covered. Most private insurance policy coverage is contingent upon the physician’s documentation of the need for skilled nursing care (as with Medicare coverage.) Thus, while many persons expect their private insurance to pick up where Medicare leaves off, this is often not the case.

Guarantors and Responsible Parties

Any agreement between a nursing home and a prospective resident (or the resident’s family) for the provision of care in return for payment of some kind is a contract, and any written statements should be read and understood before being signed just as in any other contract. Guarantors, responsible parties, or cosigners for these contracts are bound to make good the debts of the nursing home resident should he or she not be able to pay. If you are considering becoming a guarantor or responsible party, (for instance, son or daughter) you should take special care to understand exactly what obligations you may have to take on.

Nursing homes are regulated by both state and federal laws. While state laws vary, all nursing facilities must be licensed under state law. States usually inspect nursing homes once a year. More than eighty percent of nursing homes participate in Medicare or Medicaid, and thus are required to meet federal certification standards on quality of care, quality of life and residents’ rights.

When you enter a nursing home, you must comply with reasonable rules of the facility and you must respect the rights of staff and other residents. However, you do not surrender your basic civil rights when you enter a nursing home. While institutional care may place limitations on your privacy and lifestyle, you should expect care that is compassionate, dignified, and high quality.

The federal Nursing Home Reform Amendments of 1987 provides the following rights to residents:

Right to information - Nursing homes must provide:

written information about your rights, including personal funds, the right to file a complaint and how to contact the ombudsman and the state survey agency;

written information about the services included under their basic rate and any extra charges for additional services;

advance notice of any changes in room assignment or roommate;

an explanation of your right to make a health care advance directive and information about their policies on complying with advance directives (see Advance Directives);

information about eligibility for Medicare and Medicaid and the services covered by those programs.

upon reasonable request, the facility must provide the results of the most recent survey (inspection) of the facility.

Self-determination rights - Residents have the right to:

            choose a personal physician;

be informed in advance about any changes in care and treatment which could effect resident well being;

participate in changes in care and treatment or planning care and treatment;

voice complaints about care without fear of discrimination or reprisal for voicing concerns;

participate in resident and family groups.

Personal and privacy rights - Residents have the right to:

participate in social, religious, and community activities that do not interfere with the rights of other residents;

privacy regarding accommodation, medical treatment, written and telephonic communications, visits, and meetings of family and resident groups;

      confidentiality regarding medical and personal records.

Visitation rights - Nursing homes must permit immediate access to a resident:

by personal physician and representatives from state and federal agencies, including the ombudsman program;

immediate family or other relatives, if resident consents;

by others with "reasonable" restrictions.

Involuntary transfer and discharge rights - Residents may only be transferred or discharged under the following conditions:

the resident’s welfare cannot be met in the facility;

the resident’s health has improved so that nursing care is no longer needed;

the health and safety of individuals in the facility are otherwise endangered;

the resident has failed, after reasonable notice, to pay for care;

the facility ceases to operate.

Protection against Medicaid discrimination - Nursing homes that participate in the Medicaid program must:

have identical policies and practices regarding services to residents regardless of the source of payment;

provide information on how to apply for Medicaid;

not require a third-party guarantee of payment to the facility;

in the case of a Medicaid recipient, not charge, solicit, accept, or receive gifts, money, donations or other considerations as a precondition of admission or continued stay in the facility;

not require, request, or encourage residents to waive rights concerning Medicaid

Choosing a facility deserves much care and attention. "Shopping" might include the following: 

        Consider the alternatives first when independent living becomes difficult for an older             person. Examine the possibilities for adult day care, senior citizen housing and            homemaker/home health care services in your area by calling your local area  agency on aging. Include the prospective resident in all decision making, if                        possible. It might be helpful to jointly make a list of desirable characteristics,                including personal touches, and a list of unacceptable characteristics.

Determine the level of care needed by consulting with the personal physician and the prospective resident.

Plan a means of financing the care. Seek advice from the local Social Services Administration to find out whether the stay can be covered by Medicare or Medicaid. Consult with an insurance agency or former employer to determine whether the stay is covered by the individual’s personal health insurance or pension plan.

Make a list of appropriate facilities in your area. To get information about nursing homes or assisted living facilities, call your local area Agency on Aging.

Find out about the homes or assisted living facilities on your list by consulting with the hospital social worker if the person is coming from the hospital, and with physicians, clergy and friends.

Call the homes or assisted living facilities to see if they have openings, whether there is a waiting list and, if so, how long.

Check the level of care offered. Match the level of care required by the prospective residents with the level of care that the facility is licensed to offer. If the facility is a nursing home, determine whether the home is certified for Medicare or Medicaid.

Make appointments to see the homes or assisted living facilities. Select the two or three most attractive homes or assisted living facilities in terms of quality and level of care provided, reputation and location. Request an appointment to tour the home and to talk with the admissions director. If possible, plan your visit with the morning activity and the midday meal. Talk to the residents and, if any are present, to visiting family members and friends

When considering a facility, ask questions and make observations:

Does the nursing home have a current license?

At what level of care are nursing services available?

Are staff or family physicians and other medical services readily available to residents? Can a personal physician or nurse come to the facility?

Is there a well-organized activities program with provisions for regular input?

What facilities and staff are available for rehabilitation and physical therapy?

What are visiting hours?

Does the home or assisted living facility have continuous in-service education for staff?

Does the home or assisted living facility serve attractive, nutritious meals, or special diets that are planned by a Registered Dietitian? In assisted living facilities, will you be able to prepare your own meals if you so desire?

Is there an adequate fire safety system and is a plan posted for quick evacuation of residents?

What services are included in the "basic daily charge" of the home or assisted living facility and what services are provided for "extra charges"?

What kind of deposit is required in advance? What is the facility’s refund policy?

Do you have the right to purchase your own medications under non-emergency circumstances?

What third party payments will the home accept? Does it take Medicare and Medicaid patients? How will the facility handle patients who must switch from private resources or Medicare to Medicaid during their stay?

What is the facility’s policy for returning residents to the facility after the resident has been in an inpatient facility? What are the circumstances under which a resident will be discharged?

How clean are residents’ rooms, bathrooms, kitchens, nursing stations and lounges?

Is the home environment pleasant and attractive? Are there appropriate decorations? Are there personal decorations in residents’ rooms?

Do staff and residents seem to have a positive attitude toward one another? Do ambulatory residents appear to be free to move about?

Are residents treated with respect and afforded as much privacy as possible?

What are the daily costs of care and what is not included?

Are religious services conducted at the facility?

Can residents bring their personal pieces of furniture?

Does the facility offer special programs or a special unit for the treatment of Alzheimer’s patients or other neurological problems?

Does the facility have a policy to insure that the residents receive fresh air daily?

Does the facility have a place for the safe keeping of valuables?

The Long Term Care Ombudsman Program was established in 1979 as a requirement of the federal Older Americans Act to improve the quality of care in America’s long-term care facilities. The Program serves as a focal point whereby complaints, made by or on behalf of older persons in long-term facilities or those receiving long-term care services in the community, can be received, investigated and resolved. Additionally, the Long-Term Care Ombudsman Program identifies problems and concerns of older persons receiving long-term services and recommends changes in the long-term care system that will benefits these individual consumers.

A major component of the Program includes educating consumers of long-term care services about their rights and how to advocate on their own behalf when they have a problem or concern. The Program is also a resource for information and counseling regarding long-term care services and aging related issues. The Ombudsman Program disseminates information about long-term care services, including options for paying for services, how to choose a long-term care provider and consumer rights. The Program serves all residents in nursing homes and assisted living facilities as well as individuals receiving home care services. Under the Older Americans Act, every state is required to have an Ombudsman.

The term "assisted living" is used to describe any group residential program that is not licensed as a nursing home and that provides personal care and support services to people who need help with daily living activities as a result of physical or cognitive disability. Support services provided may include general oversight and assistance with activities of daily living and instrumental activities of daily living.

Generally, assisted living combines housing, personal services, and light medical care. The facilities provide support to those individuals too frail to live alone, but too healthy to utilize most of the medical services provided in a nursing facility. Other names for assisted living facilities include: residential care facility, domiciliary care, homes for the aged, community-based residential facility

Assisted living facilities may be free-standing, near or integrated with nursing homes, as components of continuing care retirement communities, or at independent housing complexes. Assisted living options may range from one-bedroom apartment units to free-standing two-story homes.

Assisted living facilities, unlike nursing homes, are not regulated by the federal government. Consequently, services and levels of care at these facilities vary from state to state according to different state and local laws. Most states have minimal regulations, allowing competition in the marketplace to set the standards for quality.

Private funds pay for about 90 percent of assisted living services. Some assisted living services may be paid for by Supplementary Security Income, Older Americans Act, and Social Services Block Grant programs. Long term care insurance policies may, in some cases, cover assisted living as an "alternative care benefit". Medicare does not cover assisted living expenses under any circumstance.

Choosing an assisted living facility can be a difficult decision. It is important to visit several communities and to talk with residents and staff. A careful comparison should be made of fees and services offered by different facilities. For important points of consideration, refer to "Choosing a Facility" and "Questions to Ask" under the Nursing Home section

Adult day care programs provide a variety of daytime services for impaired older adults. Individuals who participate in adult day care programs attend on a regular, planned basis. Most adult day care centers are open 8-10 hours a day on weekdays and there is a trend toward weekend service as well. Adult day care centers work to assist the older adult to remain living in the community at the highest level of independence possible. Many participants and their family caregivers are able to delay or avoid use of more costly in-home and nursing home care by using adult day care. Admission requirements and procedures vary somewhat across centers, but all require that the applicant have a personal physician or clinic with whom care can be coordinated.

Adult day care services are designed to assist both the participant and the family. Adult day care centers provide health maintenance services, therapeutic activities, personal care, and emotional support to participants. Older persons may benefit from the special care if they are:

                        physically impaired

socially isolated

in need of personal care help

mentally confused

limited in their ability to function independently in the community

in need of supervision

Family caregivers benefit from adult day care as well. Knowing their family member is safe at the day care center gives employed caregivers peace of mind while at work.

Although many adult day care participants pay for care out-of pocket, almost all centers have provisions such as sliding fee scales or scholarships, to serve those who need financial assistance. Most long-term care insurance policies cover adult daycare, and worker’s compensation policies have paid adult daycare costs for those with work-related disabilities. Medicare, however, does not pay for adult day care or other long-term care services (nursing home, adult home, in-home companions.) Medicaid may pay for adult day care and transportation if the person meets financial and nursing home pre-admission screening criteria.

Home care refers to a variety of services performed at a person’s home by an outside agency. It enables elderly persons requiring part-time medical or personal care to remain in their homes and thereby avoid the higher priced nursing home care. "Home health care" is the term used by Medicare when referring to specific medical services rendered in the patient’s home which are reimbursed by Medicare. However, there are many additional services available to homebound elderly which are not covered by Medicare. The term "home care" refers to this broader range of services. Both "home health care" and "home care" will be discussed in this section

The types of services which are available fall into two categories: skilled services and home support services.

Skilled Services

Skilled services include part-time nursing care, physical therapy, speech therapy, occupational therapy, medical supplies and equipment. For example, a nurse may come to the house periodically to change the dressing on a wound, adjust a catheter, or give an injection. The physical therapist may come to review exercises with a patient recovering from a hip fracture. The cost varies depending on the length of the visit and the type of care. Some of the expense may be covered by Medicare, Medicaid or health insurance.

Home Support Services

A homebound senior citizen may also receive home support services, such as homemaker services and home chore services. These programs offer assistance with the activities of daily living. A homemaker or home health aide will help the patient with bathing, grooming, and dressing. The aide may also assist with meal preparation, grocery shopping, and light housekeeping. A home chore service provides house cleaning, household repairs and yard work. These services are usually not covered by Medicare or Medicaid. The new standardized Medicare Supplement policies ("Medigap") have very limited at-home recovery programs, and not all companies offer these plans and all applicants do not qualify. Sometimes religious or civic organizations may offer limited services free of charge or there may be a publicly sponsored program through the Area Agency on Aging in your community. Home care may be an optional extra in a long-term care insurance policy. More information can be obtained from your Area Agency on Aging.

Nutritious home-delivered meals are available to home bound senior citizens through programs like "Meals on Wheels". Meals are delivered once or twice a day, five to seven days a week. Most programs can accommodate special diets. The cost is modest and most programs have a sliding scale fee based upon one’s ability to pay. This program varies from place to place and local information can be obtained by contacting your Area Agency on Aging.

Other home care and support services may be provided by programs in your community. Typical community based services include the following: transportation, case management, information and referral, legal services, adult day care, congregate meal sites, home delivered meals, senior centers, respite care, and telephone outreach. Contact your local Area Agency on Aging for available community-based services.

Home care is available through hospitals, public health departments, Area Agencies on Aging and private agencies. If the home care follows a hospitalization, frequently the hospital discharge planner will assist you in coordinating the services you need.

Your family doctor is able to develop a plan for home health care and recommend agencies to contact. If you anticipate reimbursement from Medicare, Medicaid, or insurance, a doctor’s certification of medical need is essential. Other sources of information include: Area Agencies on Aging, adult day care centers, and local religious organizations, such as Jewish or Catholic Family Services. The National Home Care and Hospice Directory lists home care organizations by city and state. Look for a copy at the public library or your Area Agency on Aging.

You can determine the caliber of a Medicare-certified home care provider by reviewing its Medicare Survey Report. Contact your state’s insurance counseling program for assistance in obtaining this document. Many states require home care providers to earn a license to operate. In order to obtain a license, facilities must meet basic legal and operating standards imposed by the state department of health. Contact your state health department to obtain information on its licensed providers. Additionally, you should inquire about the accreditation of the home care provider. Several professional organizations have established standards to define quality in home care services, and many home care providers voluntarily seek accreditation from these organizations to signify that they have met national standards for quality care.

The National Association for Home Care suggests asking the following questions in choosing a home care provider

How long has the provider been serving the community?

Does the provider supply literature explaining its services, eligibility requirement, fees, and funding sources?

How does this provider select and train its employees? Does it protect its workers with written personnel policies, benefits packages, and malpractice insurance?

Are nurses or therapists required to evaluate the patient’s home care needs? If so, what does this entail? Do they consult the patient’s physicians and family members?

Does the provider include the patient and family members in developing the plan of care?

Is the patient’s course of treatment documented, detailing the specific tasks to be carried out by each professional caregiver? Does the patient and family receive a copy of this plan, and do the caregivers update it as changes occur? Does this provider take time to educate family members on the care being administered to the patient?

Does this provider assign supervisors to oversee the quality of care patients are receiving in their homes? If so, how often do these individuals make visits? How can the patient and his or her family members call with questions or complaints? How does the agency follow up on and resolve problems?

What are the financial procedures of this provider? Does the provider furnish written statements explaining all of the costs and payment plan options associated with home care?

What procedures does this provider have in place to handle emergencies? Are its caregivers available 24 hours a day, seven days a week?

How does this provider ensure patient confidentiality?

Medicare will pay for home health care if all of the following conditions are met: 

a doctor certifies your need and sets up a plan of treatment;

you need intermittent (part-time) skilled nursing care, physical therapy, or speech therapy;

you are homebound; and

the services are provided by a Medicare-certified agency.

Not all agencies are Medicare-certified. If you satisfy these conditions, then Medicare will pay the reasonable costs for covered home health visits. You will have to pay for the costs that Medicare does not cover, including the difference, if any, between what Medicare considers "reasonable" and the actual cost. Medicare does not cover the cost of full-time nursing care at home, meals delivered to your house or homemaker services. However, in some circumstances, Medicare will pay for intermittent use of a home health aide, occupational therapist, medical social services, and medical supplies and equipment.

For lower income persons, Medicaid may also cover home health care for an individual who would otherwise qualify for admittance to a nursing facility but wishes to remain at home instead. Because Medicaid sometimes reimburses the home health agency less than the actual cost of care, not all agencies will accept Medicaid patients. Therefore, a Medicaid eligible patient should inquire about this first. 

Although in the past, home health care has not been included in private insurance plans, many insurance companies are beginning to offer the coverage. You need to check the coverage under your policy and also check with the home health agency to make sure they will accept private insurance. Those eligible for Veterans Administration benefits or CHAMPUS should look into coverage under these programs as well. 

While reimbursement is usually available for skilled services received in the home, this is seldom the case for home support services such as a homemaker or an aide. Some agencies have received federal, state or local government funds to provide these services to senior citizens meeting specified eligibility requirements. You should check with your local Area Agency on Aging or the individual home health agency to see if you qualify. 

Also known as life care retirement communities, these facilities have been in existence for over 60 years; however, the industry has greatly expanded in the last two decades. Although the vast majority of Continuing Care Retirement Communities (CCRCs) are run by nonprofit organizations, a number of major corporations have entered the market. The number of these communities is expected to double by the year 2000. The typical CCRC serves between 200 and 300 residents.

A Continuing Care Retirement Community is a financially self-sufficient residential community for senior citizens that offers medical care and nursing services in addition to independent living. Continuing Care Retirement Communities vary in the image they wish to project. Some are closely aligned with a particular religious denomination. Some seek to cover the basics in a simple community setting, while others attempt to create a country club or resort atmosphere.

Type A Facility: Extensive Plan

CCRCs differ in the amount of health care they offer their residents. What is sometimes referred to as a "Type A" or "extensive" facility will provide food, housing, medical services and nursing care, and assisted living care for the remainder of the retiree’s life, frequently even after you have exhausted your financial resources. It can be thought of as a form of self-insurance, spreading the risk of catastrophic health care costs among all residents in the CCRC so that no one will face financial ruin. Because of the guaranteed health care, Type A facilities are the most expensive.

Type B Facility: Modified Plan

"Type B" or "modified" retirement communities offer the same services as the Type A facilities but without the health care guarantee. For example, a Type B facility may provide 15 days of nursing care per year. After you use up your 15 days, you must pay a daily charge for the nursing care. In the event you run out of money, the facility is not contractually obligated to provide for your care.

Type C Facility: Fee for Service Plan

In the "Type C" or "fee for service" community, residents have priority access to the nursing unit, but they must pay for the services received. Moreover, Type C facilities generally do not include meals or personal care assistance as part of their package. Consequently, they are the least expensive

A Continuing Care Retirement Community charges two fees - a onetime entry fee followed by a monthly maintenance fee. The entry fee may currently range anywhere from $38,000 to $400,000 depending on whether it is a Type A, B, or C facility, the size of the living unit, and the amenities associated with the community (such as swimming pool or golf course). The monthly maintenance fee usually ranges from $650 to $3,500 and may be increased from year to year as inflation dictates. Residents meet the monthly fee with social security and pension income, while the funds for the entry fee are often obtained from the sale of the retiree’s home. An alternative used by some CCRCs is to offer a reduced entry fee which is accompanied by proportionally higher monthly fees

Security and flexibility are two reasons for joining a CCRC. With increased life expectancies brought about by modern medicine, many elderly persons experience two stages in their retirement years. The younger elderly are capable of independent living and community involvement. For this age group, the social and recreational features are attractive. Dependency and declining health characterize the second stage of retirement. The CCRC is equipped to keep you in your apartment as long as possible. Housekeeping and dietary services (offered by the Type A and B facilities) handle the day-to-day living activities you may no longer be able to do for yourself. Transportation to shopping areas is often provided. Most importantly, a nursing facility is located on the premises if and when skilled or custodial care becomes necessary. The support systems of a CCRC enable various gradations of living along the independent/dependent continuum tailored to the individual’s needs. In addition, some life care contracts (Type A) promise to care for you even after you exhaust your financial resources.

There are some drawbacks to living in a Continuing Care Retirement Community. The most obvious is the cost. The entry fees are so expensive that should you join a CCRC and later find you do not like it, the bulk of your life savings is gone and you cannot afford to move elsewhere. Some senior citizens do not desire a community as homogeneous as CCRCs tend to be. Finally, there have been a few instances where, due to fraud or mismanagement, CCRCs have gone bankrupt.

Initially, you must determine whether or not communal living is for you. The book If I Live to be 100 by Vivian Carlin and Ruth Mansberg is very helpful in this regard. Free from technical language, the book describes the day-to-day lives of residents in a retirement community. The authors address management/resident relations, the nursing unit, recreational activities, and the relationship between the retirees and the townspeople.

Once the decision is made to pursue this form of housing, you should visit each CCRC you are considering and determine what the entrance requirements for each are. You should also inquire about rules and policies. A visit ought to include a night in the guest house as well as a couple of meals in the dining room. Ask questions about the services available. How many meals are included in the contracts? Is service available to the resident’s apartment if it is needed? Is the kitchen willing to prepare meals to fit a prescribed diet?

You should tour the grounds and buildings, paying close attention to the layout, appearance, upkeep, and security. Within the apartment you should look for the usual features which concern prospective renters or homeowners, along with looking for an emergency call system. You should engage the residents and staff in conversation. Are the people friendly? How do they interact? Are there many social activities? Is there a library? Are there recreational facilities?

You should insist upon visiting the nursing unit. This is essential for the Type A facilities as health care constitutes a significant portion of the services you will be purchasing. Does the health care facility provide a full range of services, such as annual or routine physical exams, dental care, physical/occupational/speech therapy, prescription drugs and/or eyecare? What is the limit to the health and medical care coverage that is included in the regular fees? What is the community’s policy for transferring residents from apartment and independent living units to nursing home facilities? What is the policy for returning residents to their apartments or independent living units? You should observe the manner of the staff. Are they calm or frantic? What about the patients? Are they groomed and dressed? Are the halls clean and free of odor? Finally, the visit should include a trip into town to see the nearby churches, stores and recreational opportunities.

More important than the physical layout of a retirement community is the insurance/ services package you will be buying. You must remember that you are buying a contract and not real estate. To this end, you should carefully read the contract and have your lawyer read it. You should have in writing all fees and the corresponding services to be rendered by the provider. Clarify whether services such as housekeeping, linens and personal laundry, telephones, parking and transportation are included. You should ask the facility for its fee-hike history. You should see what the refund policy is in the event a resident dies prematurely or chooses to leave the community. Nonrefundable entry fees tend to be lower. However, retirees wishing to leave an estate for their heirs may want to look for a CCRC offering a refundable (or partially refundable) entry fee.

You and your lawyer should also scrutinize several annual reports and balance sheets of the CCRC. You should ask if an actuarial study has been done and request a copy of the report. Even more so than a financial disclosure statement, an actuarial study will reveal whether the facility will be able to meet its obligations several years down the road. In addition, you might inquire if the CCRC has been accredited by the American Association of Homes and Services for the Aging (AAHSA). As of January 1996, this group has inspected and accredited over 180 CCRCs in 24 states.

Continuing Care Retirement Communities are increasing in popularity as evidenced by the long waiting lists for admission at some of the more established facilities. Careful planning, coupled with wise shopping, can make this form of housing and health care a successful alternative for many senior citizens.

As you make the transition into senior citizen’ s status, the housing accommodations that once met your needs may no longer serve your best interest. Some people prefer to avoid the physical and financial requirements of ownership and instead prefer to rent a residence or apartment. Here are some guidelines for tenants to follow

After deciding the amount of rent you can afford and the type or house or apartment you want, you should shop around thoroughly. Carefully inspect the rental property you are considering, and note any problem areas or damage. It may be helpful to ask other tenants about the property and landlord relations. Other points of consideration include the following:

insulation

heating and cooling systems

pets

security

parking

type of people living there (old, young, married, single, permanent, transient, etc.)

quality of construction

availability of public transportation

facilities for handicapped

utilities (cost and availability)

A lease is an agreement between the owner of property, the "landlord," and a person who wants to use the property for a period of time, the "tenant." The lease may be oral or written. However, a written lease is much better and safer.

An example of an oral lease is a tenant telling a landlord that he or she will pay $500 a month for the apartment and the landlord saying, "Fine, it’s yours," accepting the first $500 rent payment and delivering the keys to the property. Generally, the term of an oral lease is limited to the period of time for which the tenant pays the rent, up to one year. For example, if the tenant pays rent each month under an oral agreement, the term of the lease is only one month. This is called a month-to-month tenancy. If the tenant pays rent once every three months, the term of the lease is three months.

A written lease spells out the rights and responsibilities of both the landlord and the tenant. A written lease is a contract signed by both the landlord and the tenant. Before signing a lease, you should read it carefully and ask the landlord to explain anything that you do not understand. If you are not satisfied with the explanation you receive, it may be wise to consult an attorney. Before signing a lease, you should read it carefully, fully understand the contents, and agree with the contents.

Landlords can and probably will request a security deposit before renting property to you. The purpose of the deposit is to guarantee that you will take good care of the property while you are renting. The laws affecting landlord-tenant relations vary from state to state, but generally, the following is true:

The security deposit may not exceed the total of two months rent for unfurnished rental properties.

The landlord can keep the deposit money for amount of rent owed and for the costs of cleaning and damage repair after you move from the property.

If the landlord keeps any part of the deposit, the landlord must provide a written list of damages.

While state laws vary, generally the following are some basic duties of the tenant and the landlord:

Duties of Tenant

Pay rent on time.

Keep apartment clean, remove rubbish form the premises, and do not deliberately destroy property.

Do not make unreasonable use of the premises.

Inspect the premises before leasing them to make sure they will fit your needs.

Surrender the premises at the end of the lease.

Duties of Landlord

Comply with local building and housing codes affecting health and safety.

Make repairs and keep dwelling a fit and habitable place.

Keep common areas safe.

Keep receipts/canceled checks of rent payments, copies of lease agreements, records of damages, and any correspondence between yourself and the landlord.

The landlord can keep a security deposit only in the amount of rent owed, or for the costs of repairs or cleaning after you move.

If you suspect or find that the rental unit is substandard, you should:

Call the landlord and ask that the repairs be made.

Give written notice of the problems to the landlord by certified mail.

Call the health department or building inspector if the landlord refuses to make the repairs.

Contact a lawyer if the problem still exists.

Section 8 Housing or the Rental Assistance Program is a rental subsidy program funded by the federal government. The program is designed to supplement the rent payments of low income families and individuals who qualify. Under the program, the tenant pays only up to 30 percent of his or her income in rent. The government pays the difference. An advantage of the program is that an elderly tenant can live in the apartment or house of his choice and may even be able to get help paying for the place where he already lives.

To qualify for assistance, your income must be within the specific limit for your locality. The limit is also dependent on household size. You may be eligible for the Section 8 Housing Program if you:

 belong to a family consisting of yourself and one or more family members.

 are handicapped, disabled, or 62 years of age or older, and you live with others who are handicapped, disabled or elderly, or you live with someone who takes care of you.

 live alone and are 62 years of age or older.

 live alone and are handicapped, disabled, or are forced to move by government action or natural disaster

Your eligibility is determined during an intake interview. If you are eligible and are considering moving or currently have no adequate housing, you will be told how to look for reasonably priced housing to meet your needs.

After certification to participate in the program, you have approximately 60 days to find suitable housing and an owner who agrees to lease to you. Any housing approved under the program must meet minimum housing standards for decent, safe, and sanitary housing as established by the U.S. Department of Housing and Urban Development (HUD). Additional local minimum housing codes must also be met. Your present residence may qualify if it meets these required standards.

Once your lease is signed with the landlord, the local agency reviews it and often inspects the dwelling to make sure it meets program standards. Next, the local agency and the landlord sign a contract authorizing payment of rent on your behalf. You pay a monthly amount for rent, which is determined by your income, family size, etc. and the local agency pays the difference between the family contributions and total amount of rent due. Both the family and the agency make the payments monthly and directly to the landlord. Under the program, the tenant pays no more than 30 percent of his/her adjusted income. This amount is equal to the gross annual family income after certain deductions are subtracted in accordance with instructions from HUD. A share of the rent to be paid by the tenant may be further reduced if (i) the utilities are not included in the rent charged by the landlord, or (ii) the tenant has medical bills, including medical insurance bills, which exceed three percent of his/her annual income.

A limited number of Section 8 Rental Assistance certificates are available. Qualification for the program does not necessarily entitle you to immediate assistance. For some eligible individuals, the waiting list for the certificate is quite long.

For more information on the Section 8 Rental Assistance Program, contact your local housing authority, or you can contact your local Area Agency on Aging to find out if Section 8 assistance is available in your area.

The Energy Assistance Program is a federally funded program which helps eligible households with the cost of heating their homes. Benefits are available for low income families if they are responsible for heating costs. To be eligible for assistance, a household must meet certain income and resource requirements, and these requirements change yearly. If you receive SSI, your household is probably eligible. For more information, contact your local Area Agency on Aging

Both investor owned utilities and rural electric cooperatives provide energy assistance to low-income households. Programs include fuel assistance, cooling assistance, and budget billing. For more information, contact your local electric utility.

If you do not have a telephone or cannot afford the one you have, the local telephone company in your area may waive or reduce many of the service connection charges if you are a low-income household through the "Link-Up America" program. This program generally provides a 50 percent reduction in service connection charges for a single phone line, provided you have no phone service and are eligible for Social Service assistance. Contact your local telephone company services representative for more information.

If you are 62 years of age or older, you may want to explore the possibility of obtaining a reverse mortgage on your home.

What Is a Reverse Mortgage?

A "reverse mortgage" is a mortgage loan against home equity. The total loan amount is based on the current appraised value plus anticipated appreciation of the home, and on the life expectancy of the borrower. This loan does not require any monthly payment. Instead, it provides monthly cash advances or line of credit to a borrower, and requires no repayment until some future or determinable time--usually when the last borrower dies, sells or leaves his or her home.

It is the "reverse" of forward conventional mortgage, where the borrower starts with less equity, makes monthly payments, reduces the loan balance and increases equity. At the outset of a reverse mortgage, the borrower owes very little against his or her outstanding mortgage and has substantial equity in the property. The lender makes monthly payments to the borrower, the loan balance rises, and equity declines.

The FHA-Insured Reverse Mortgage

The FHA-insured reverse mortgage, made under the United States Department of Housing and Urban Development (HUD) Home Equity Conversion Mortgage Insurance Demonstration (HECM), has the most attractive features for seniors who qualify as borrowers. Under HECM, all co-borrowers must be at least 62 years of age and own the home free and clear or have an outstanding mortgage balance low enough to be refinanced with the HECM proceeds. Advantages of the HECM reverse mortgage are:

HECM reverse mortgages are non-recourse. The principal amount available is based, in part, on the assumption that the borrower’s home will appreciate by an assumed 4 percent a year, compounded annually. If instead, the home value goes down, the HECM lender must continue to make advances until the HECM loan is due. The difference is made up by FHA insurance.

The due date for a HECM reverse mortgage is most favorable for seniors. The due date is when: (i) the last borrower dies; (ii) a borrower conveys his or her title to the property and no other borrower retains title or a long-term leasehold interest; (iii) the property is no longer any borrower’s principal residence; (iv) a borrower fails to occupy the property for more than 12 consecutive months because of physical or mental illness and the property is not the principal residence of at least one other borrower; or (v) a loan obligation of the borrower is not performed. The principal amount available to the borrower is based in part on the HECM program mortality tables. If any co-borrower outlives these assumptions, again, the HECM lender must continue to make advances until the HECM loan is due.

HUD will fund HECM loan advances to the borrower if a lender defaults. The defaulting lender may incur significant penalties. Other than some delay in receiving payments from HUD, however, little risk from lender default exists for a HECM  borrower.  Obtaining the HECM reverse mortgage depends on age and home ownership, not on the borrower’s income, credit or assets.

Disadvantages of Reverse Mortgages

The benefits of a reverse mortgage are dependent on the particular situation of the borrower. A reverse mortgage can be invaluable to elderly persons who can no longer afford to live in their residences. Nevertheless, by utilizing the reverse mortgage, a borrower must realize that his or her home, which is often the most significant estate asset, is becoming encumbered, and will not be left to the heirs debt-free. The owner remains liable to make all repairs and to maintain the property, and must pay real estate taxes, assessments, and other costs.

As a general rule, the longer a borrower keeps a reverse mortgage, the lower the total annual loan cost will be, because mortgage insurance, closing costs, interest, and service costs will be spread over an extended period. The major disadvantage is the reverse mortgage’s high total annual loan costs (TALC) if borrowers die or sell after a short time.

Conversely, if the borrowers outlive the mortality assumptions, or the house fails to appreciate at the assumed four percent annual rate, the TALC may be very low.

It is important to remember that, as the elderly population of this country increases, so do continuing problems of fraud and elder abuse. There have been examples of so-called "estate planners" or mortgage finders who have charged outrageous fees to the elderly for matching up borrowers and lenders. For example, one 69-year-old borrower was charged $5,571 (10 percent of her loan amount) to an estate planner; another elderly couple, one of whom was disabled, were charged $4,000 (8.5 percent of their loan amount); and a 75- year-old borrower paid $4,200 to an HECM mortgage finder. This latter victim later said, "I never thought I would have to pay that much money [to someone] for simply coming to my house a few times and giving me the name of a lender." HUD has estimated the hundreds of elderly homeowners have been victimized by mortgage finders who charged thousands of dollars for information on reverse mortgages. For people of limited means who are trying to find a way to stay in their homes for the remainder of their lives, the charging of these excessive fees is unconscionable. (Excerpted with permission from Reverse Mortgages: maximizing Income Opportunities for Seniors, Experience, Vol. 7, No. 4, Senior Lawyers Division, American Bar Association, Summer 1997.)

Reverse mortgage documents are complex and can be confusing. Consequently, anyone contemplating a reverse mortgage should consult and be counseled by an experienced attorney who is completely independent of the mortgage lender. It is essential that the homeowner/mortgagor understands the contract and its disadvantages as well as its advantages, before he/she signs it.

When an older client divorces, all of the issues set forth in this handbook must be considered, as well as others unique to the marital relationship. The first step is to obtain a lawyer. A matrimonial lawyer can be located by contacting your physician, your clergyman, the local Bar Association’s Lawyer Referral Service or your local Chapter of the American Academy of Matrimonial Lawyers.

When you meet with your lawyer, if you are overwrought or upset, it is also advisable to have a relative or friend accompany you. You should first discuss the fee arrangement to assure that you will be able to afford that particular lawyer. If you cannot afford the fee, you should contact your local Legal Service Corporation.

You must be completely honest with your lawyer. You will need to know your monthly living expenses, the family income, all assets and how titled, whether there are any agreements between you, existing medical insurance, whether there are Social security or other retirement benefits and whether or not they are in pay status, the names and status of all credit accounts, including utilities. If you do not have this information, your lawyer will help you obtain it.

If you are interested in learning more about divorce, you may order a copy of The Divorce Handbook, published by the American Academy of Matrimonial Lawyers which can be purchased for $10 from the AAML, P.O. Box 11704, Columbia, South Carolina 29211.

When someone dies, their estate is settled through a process known as probate. Assets are gathered and applied to pay debts, taxes, and the expenses of estate administration. The remaining assets are then distributed to beneficiaries. There are different types of probate procedures, some of which involve court supervision.

Supervised Administration is a method in which the court plays an active role in approving each transaction.

Independent Administration is a method in which the court’s role is diminished or eliminated; it often requires the consent of all beneficiaries.

Small Estate Administration involves no court supervision. This method may be used for estates ranging from $1,000 to $100,000 depending on state law.

The term "estate planning" refers to the ordering of your affairs so that your property, called your estate, passes as you wish to your family and loved ones after your death. It involves a coordinated effort by you and your professional advisors (lawyer, accountant, insurance agent, financial planner and others) to minimize the state and federal death taxes and the expenses of death. Estate planning devices include wills, trusts, and other methods of providing the orderly transfer of assets after death. 

A will is a written document stating your directions for the distribution of your assets after your death. Generally, a will lists your individual beneficiaries and what part of your estate you wish to give each of them. Your will also should name an executor, the person who will be responsible for administering your estate.

A will allows you to personalize the distribution of your property. If you do not make a will, your estate will be distributed by a court-appointed executor according to state-law rules, which run contrary to some people’s intentions. For example, some items may have significance for certain members of your family, or perhaps you have a child with special needs. A will can make estate administration proceed more quickly and smoothly. For larger estates, a properly drafted will can significantly reduce estate taxes.

With some minimal advance planning, a will is relatively simple and inexpensive to have prepared. The rules for making a valid will vary from state to state, but generally the following requirements apply:

The maker of the will, called the testator or testatrix (female), must be at least 18 years of age; 

            The maker of the will must be of "sound mind" at the time the will is prepared;

The will must be in writing and signed by the maker; and

The will must be witnessed by at least two people who will not receive any property under the will. The witnesses must sign their names at the end of the will in the presence of the testator.

While the law does not require that you use a lawyer to write your will, it is recommended that you consult an attorney to help you prepare the will because improper will planning can cause needless expense. The following steps will help you in the preparation of your will, prior to meeting with a lawyer:

List the family, friends, and/or organizations to whom you wish to leave property. The list should include the full names and possible addresses of each recipient.

List all the property you own and how it is titled. Make the list according to categories of property:

Real property, such as land or a home.

Tangible personal property, specific items you can see, such as jewelry, cars, and art.

Intangible personal property, such as bank accounts, stocks and bonds.

 Decide how your property will be divided among the recipients. For example, you may want to have your property split equally among your children. You should consider alternative recipients in case you outlive your first choice. For example, you might name your grandchildren as alternates in the event your child does not survive you.

      Choose an executor to administer your estate and distribute your assets. You may choose your surviving spouse, or in the event that your spouse is not alive or able, then one or more of your children, or perhaps the trust department of your bank. A bank can help in the estate planning process when it is named executor. You should consider a will provision which provides a mechanism for removal of an executor and the naming of a successor.

You should review your will from time to time, especially if your circumstances change significantly. For example, you may need to change your will if you move to a new state or get married, remarried or divorced.

You can change your will by making a new will or signing an amendment, known as a codicil, to your existing will. If you wish to revoke your previous will, you should destroy it after execution of the new one in order to avoid the confusion produced by the existence of more than one will.

Generally, divorce or annulment of your marriage does not entirely revoke your will. It only revokes those provisions pertaining to your former spouse. However, it is still a good idea to reconsider the terms of your will in this situation. 

If you die without a will, you are said to have died intestate. If you have not left a valid will or trust, or have not transferred your property in some other way, the state will determine how your property will be distributed. An administrator will be appointed to collect your assets, pay debts collectible against you, pay your funeral and burial expenses, and then distribute the remainder of your possessions to persons specified under fixed rules of state law. Depending on the state, intestacy laws may give property to the surviving spouse, or may split the estate between spouse and children.

A common misconception is that married couples don’t need to make wills. When one spouse dies, the property he or she jointly owns with the other spouse passes to that person, outside of probate and in the absence of a will. But when the surviving spouse dies, problems arise because there is no longer a joint owner of the property. In the absence of a will, this property is distributed according to the state law rules. 

Life insurance policies in no way take the place of having a will. If your policy is payable to your estate after death, the proceeds will be distributed according to your will. If the policy benefits are payable to a beneficiary other than your estate, such as your spouse or another relative, your will has no effect on the distribution.

A living trust is similar to a will in that it is a method for distributing property after death. It may also help with asset management during your lifetime if you become incapacitated. A living trust is an arrangement whereby a trustee manages property for the benefit of a beneficiary. This type of trust is set up during the lifetime of the property owner (or grantor). The grantor transfers all or part of his or her property into the trust prior to death. Living trusts may also be created jointly by a husband and wife. 

Many people prefer living trusts because the trust’s terms do not become public at the grantor’s death, and the assets owned by the living trust do not pass through probate court. Living trusts are also promoted as devices which allow federal tax savings. However, unless your estate exceeds $600,000, ($625,000 in 1998 and progressively higher in later years) your estate will not be subject to federal estate tax and the living trust will not provide any extra savings. If you are interested in a living trust, you should seek the advice of your attorney in order to draft a trust instrument which best suits your particular needs and circumstances.

Because property in joint ownership does not pass through probate, some people may be tempted to use joint ownership to distribute their estates with the idea of sparing their family the expense and delay of probate court proceedings. However, joint ownership can complicate your affairs while you are still living since your control over jointly held property is limited. Joint ownership gives another person equal control over whatever property you decide to place under that arrangement. Adding names to a title or deed may also negatively affect your eligibility for tax credits and government benefits. If you are considering joint ownership as a will replacement, it would be wise to contact your attorney for advice and assistance.

It is important to think about the care and treatment you would or would not like to receive in the event that you become incompetent or terminally ill. It is equally important to discuss these thoughts with your family, loved ones, and health care providers. Many people do not want life-sustaining treatment, such as a respirator, while others prefer all available treatments. Discussing your ideas will help you clarify them and ensure that your family and loved ones understand your preferences and can communicate them to your physician if you are unable to do so. In addition, it may be helpful to make an advance medical directive.

An advance directive is a way to communicate your wishes about the use of life-sustaining treatment. It can be used to authorize or refuse certain treatments and to designate another person to make medical decisions for you. Written advance directives may be made at any time and oral advance directives may be made after a person has been diagnosed with a terminal condition. Oral advance directives are generally reserved for people who are incapacitated and unable to make a written document. Advance directives may be revoked at any time.

There are two types of advance directives: the living will and the health care power of attorney.

Living Will

A living will is a written statement to your family and physicians of your choice about the use of particular life sustaining medical treatments. It allows you to put into writing any kind of medical care you want to receive or avoid if you are expected to die soon. Essentially, the living will is a guide for your doctors if you become so sick you cannot communicate. The living will is NOT the same as a last will and testament, and has nothing to do with what happens to your belongings after you die.

Health Care Power of Attorney

The health care power of attorney (or health care proxy) tells your physicians that you have designated someone else to express your medical care wishes when you are unable to do so. The person you designate should be someone you can trust to tell your wishes to the doctor.

You have the right to choose a living will, health care power of attorney, both or neither. An attorney may be helpful but is not required when preparing your advance directive.

Many advance directive forms are available for your use, but you may choose to personalize the form to effectively communicate your wishes.

Your advance directive may express your wishes regarding the following:

state or levels of functioning in which you would want or not want life-sustaining treatment;

types of life-sustaining treatment you may want or not want and under what conditions;

the use of artificial nutrition and hydration;

instructions about any other specific medical procedure that may be expected, in light of your personal and family medical history;

organ donation wishes;

preferences regarding pain control and comfort care;

      preferences regarding other aspects of end-of-life care, such as your place of care and environmental wishes.

The Patient Self-Determination Act is a federal law that requires most hospitals, nursing homes, home health agencies, and HMO’s to provide information on advance directives at the time of admission. Advance directive forms are available in both official state law forms and in unofficial forms created by state medical and bar associations and national organizations such as the AARP, American Bar Association, and the American Medical Association.

At some point you may find it difficult or inconvenient to conduct some personal business that may easily be handled by a trusted friend or relative. For example, you may be temporarily ill and confined at home or in the hospital, or be without good transportation. Bank withdrawals and deposits, signing of deeds for sale of real estate, and other business affairs may be handled for you by another if you make a power of attorney or a durable power of attorney

Both a power of attorney and a durable power of attorney are written documents that allow one person (the maker) to give another (the holder) certain rights to handle the money, real estate, and personal property of the maker. A power of attorney is only good so long as the maker is capable of handling his own affairs. If he becomes incapacitated or disabled, the power of attorney generally becomes ineffective. However, a "durable" power of attorney will remain effective even if you become disabled or incapacitated.

A durable power of attorney is especially useful to save you, your family and loved ones from court proceedings to appoint a guardian or committee for you if you become incapacitated. See Guardianship. As a practical matter, most attorneys recommend the use of a durable power of attorney more than a power of attorney because the durable power of attorney is long-lasting.

Both the power of attorney and durable power of attorney are created using specific language, and the advice of an attorney should be sought in preparing them. Care should be taken to ensure you make these documents as specific as possible in order to protect your rights and property. You should be sure that the person granted your power of attorney is an individual who you completely trust to use the power as you would direct if you were capable of doing so.

A legal guardian is a person who is given the legal right to care for another person and/or person’s property. Generally, guardianship involves the appointment of a person by the court to have care and custody of another person (the "ward") who is unable, because of illness, accident, or advanced age, to care for himself or herself. Conservatorship involves the appointment of a person to manage only the financial resources of another person. Definitions may vary from state to state, so the general term "guardianship" will be used from here on.

Normally, any interested adult person may file a petition with the Court for the appointment of a guardian of an incapacitated person. The person filing the petition is not necessarily the person who will be appointed the guardian. The individual for whom guardianship is sought has the right to a notice of the proceeding and a right to a hearing on the question of his or her capability. The Court may appoint an attorney or guardian ad litem to represent the interests of the alleged incompetent in the proceeding. If the Court finds the person incapacitated, it will appoint a guardian for medical reasons and proof of functional disability. The alleged incompetent has the right to appeal this decision to a higher court. In some cases, the Court may appoint a "limited" guardian for a person who suffers from only a mild disability or partial incapacity. This appointment can preserve many of the person’s legal rights.

Guardianships deprive the incapacitated or disabled person of many civil rights. Thus, before you begin guardianship proceedings, you should be certain such steps are absolutely necessary. You should carefully consider whether the proposed ward is able to make decisions concerning his or her personal or business affairs. Someone may need a guardian when:

Due to disability, the person has difficulty making decisions that keep him or her from harm, AND

The person refuses or is unable to accept assistance or support services (such as money management or home care services) to protect him or her from harm, OR

Help is being provided but is not protecting the person from harm, OR

      The person has not previously chosen an individual to act on his/her behalf, or the individual chosen has not acted in his/her best interests, and

The person’s health and well being are in imminent danger, and decision about medical treatment, placement, and/or finances must be made.

For more information on guardianship, contact your local Area Agency on Aging or local Legal Aid Office.

Planning Ahead

Planning before the time of need or before the funeral has many advantages. Your wishes concerning your funeral can be specified to eliminate confusion and differences of opinion among survivors. The funeral expenses can be paid in advance, either in full or in installments, to eliminate financial burden at the time of need. Many funeral homes will agree to furnish goods and services at a set price, no matter when you die. These arrangements can be funded through a trust or by specially designed insurance policies. Cemetery property can be purchased in advance and an appropriate monument can be secured. Any directions regarding the use of your body for medical research or for organ donations can be given to the funeral establishment of your choice. Individuals who will be responsible for arrangements should be made aware that you have completed these details. If arrangements have been made with a particular funeral home, they can be transferred to another on request. You can always change or cancel the arrangements.

Consumer Guide

Be aware of pre-arranged funeral plans which do not specify exactly what you will receive. A Federal Trade Commission Funeral Rule and laws in some states enable you to get the information you need to make decisions. You have the right to information regarding the costs of individual items and services, and if you inquire in person, the funeral home must provide a written price list of goods and services. Be sure to shop around and note whether or not the various plans guarantee a fixed price.

Be aware of claims delivered by dishonest salespersons. Especially be aware of salespersons who claim that the decedent ordered additional goods/items that you must now pay for. Always insist on proof that the decedent did order the goods.

Planning at Time of Need

When making funeral arrangements at the time of need, your funeral director will need certain information, such as the following:

            Full Name

            Date of Birth

            Place of Birth

            Social Security Number

            Occupation

            Father’s Name

            Mother’s Maiden Name

            Marital Status

            Education Level

            Attending Physician

            Newspapers for Obituary Insert

            Place Service is to be Held

            Minister to Officiate

            Church Affiliation

            Cemetery Plot Information

            Military Discharge Information and Serial or Service Number

            Pallbearers

            Services and Merchandise to be Furnished

Be sure that this information is given to those people who will make the arrangements and/or the funeral home of your choice.

Benefits

Social Security

Claims by your executor or heirs should be filed as soon as possible with your nearest Social Security office. You should inquire about the following items:

Lump sum benefit death payment for surviving spouse.

Life pension to widow over 60 years of age.

Pension to widow with dependent children.

Widows, widowers, divorced wives, and divorced husbands age 50 and older, if they are disabled.

Pension to decedent’s minor children.

Medicare.

Social Security ceases at death so checks should be returned to your local office or to the return address on the envelope in which the check is sent explaining the situation. Be sure to keep a copy of the check and forwarding letter. If direct deposit is being used, the bank will, upon notification, take care of the problem.

Veterans

Anyone who was a member of the military at the time of death or honorably discharged from the military is eligible for benefits. You should inquire about the following items:

Pension to widow or minor children.

Burial in National Cemetery.

Burial flag to drape casket.

Grave marker to mark grave of a veteran. (After 1980, a veteran must have served at least 24 months of active service or have been a Persian Gulf War veteran to be eligible for a marker.)

Miscellaneous

Other benefits such as retirement and life insurance will vary. Information on such items should be obtained directly from the source paying the retirement or insurance benefits. Be sure to check with the decedent’s employer for any death benefits that may be available.

When Do You Need a Lawyer?

Older persons may face problems with Social Security, SSI, Medicare, Medicaid, pensions, housing, consumer issues, guardianship, age discrimination, wills and probate, and long term care. They also may need assistance with planning through advance directives and durable powers of attorney. An attorney may be most valuable in providing help with such problems. Because early consultation with an attorney can prevent serious problems later on, you should consider consulting a lawyer for the following situations:

Before signing a contract to buy or sell a home or other real estate;

Making a will;

Signing written contracts with major financial consequences;

When planning your estate;

When you are sued or want to sue someone;

When accidents occur involving personal injury or property damage;

When you have problems accessing government benefits to which you are entitled.

An attorney can also provide valuable help with problems involving landlord-tenant disputes, divorce, and child custody.

How to Find a Lawyer

If you do not have a family lawyer, you may wish to consult friends and relatives for recommendations. You can also check with the following local agencies and support groups:

Area Agency on Aging

state or local bar association

Membership organizations

American Association of Retired Persons

Alzheimer’s Association

If you cannot afford an attorney, state and local bar associations may have information about pro bono programs, which operate for the good of the public and do not charge lawyer’s fees. Some states operate toll-free legal hotlines for seniors. Legal advice for simple matters is provided directly over the phone. For those matters which cannot be resolved by phone, referrals are made to local attorneys.

 

Introduction

Consumers of all ages, particularly senior citizens, are vulnerable to the fast pitch and hard sell of the professional salesperson. Today, we also face the impersonal, but no less effective pitch of the television or radio advertiser. With such pressures being exerted against us, it is very difficult to make intelligent buying decisions.

 

Even though consumer protection legislation and court decisions in favor of consumer rights are on the increase, your best protection is for you to be a well-informed, careful buyer. Smart consumers know their legal rights, are cautious of product exaggerations, and are unafraid to demand satisfaction for the price of their purchase. This section is designed to help you be an alert consumer who is less likely to be taken advantage of by fast-talking salespeople or misleading advertising.

 

Contracts and Credit Buying

Almost every purchase that you make as a consumer involves making a contract between you, the buyer, and a merchant, the seller. If you have ever bought a car, hired a workman to do repairs, or purchased a pair of shoes using a credit card, you have entered into a contract.

 

Contracts most often come into the picture for consumers when the seller extends credit for purchase of an item or service, with payment delayed or spread out over a period of time. This arrangement is commonly known as "buying on time" or buying on credit". In effect, the store, dealer or company that you are buying from extends you a loan in the amount needed to purchase the item or service. You, in turn, agree to pay back that money plus a finance charge of some kind.

 

Whenever you buy on credit, make sure that you know how much your total cost will be. Know how long you will have to make payments and be sure you can meet them. The Federal Truth-in-Lending Act requires persons and businesses who extend credit to tell consumers what that credit will cost in the long run. When you buy on credit, the seller must tell you the finance charge (the price you must pay for the privilege of paying over time in installments, which is added to the cash price) and the annual percentage rate of interest on the purchase you wish to make. Lenders who fail to disclose this information may be sued by their customers for twice the amount of the finance charge - from a minimum of $100 to a maximum of $1,000 - plus court costs and attorney’s fees. And if lenders are convicted of willfully or knowingly disobeying the law, they can be fined up to $5,000 or be imprisoned for one year, or both.

 

Federal Truth-in-Lending laws also grant the right to cancel any contract in writing

within three days, if the contract requires that the consumer’s home be put up as collateral or if a lien on the home could result from the contract, as in a home improvement or

home repair deal.  Before signing any sales contract, ask these questions:

Do I know what I’m buying?

Do I understand to my satisfaction what the contract says and what my obligations will be under it?

Can I get just about the same item elsewhere at a better price?

If the purchase is for credit, am I satisfied with the price I’m paying for the loan?

What kind of protection do I have in the way of guarantees and warranties? (Buying something "as is" means no warranty or guarantee about the product at all.)

Basic Contract Do’s and Don’ts

DO insist that the salesperson let you take home a copy of the contract before you sign it.

DO show the contract to a friend or a lawyer if you have any question about some provision of the contract.

DO insist that all promises (guarantees and warranties) be put in writing; otherwise, they will not be enforceable.

DO keep copies of all contracts, payment records, and complaint letters in a safe place.

DO ask your agent or the seller to include the following provision in the document if you have any questions about contract terms:

                        "This contract is contingent upon the approval of my attorney and shall

                        continue in effect until (DATE) ."

DON’T deal with any salesperson who refuses to let you take home a filled-in contract before you sign it.

DON’T sign anything unless you have had time to read it carefully or have it read to you, and you fully understand what it says.

DON’T ever sign a contract with blank spaces that are to be filled in later by the salesperson.

Unsolicited Credit Cards

It is illegal for a card issuer to send you a credit card unless you ask or apply for one. However, a card issuer may send you an application for a card or a new card to replace an expired one without your request.

Lost or Stolen Credit Cards

The most you will have to pay for unauthorized charges is $50 on each card, even if someone runs up several hundred dollars’ worth of charges before you report a card missing. In any event, your risk on lost or stolen credit cards is limited. You do not have to pay for any unauthorized charges made after you notify the card company of loss or theft of your card. So keep a list of your credit card numbers and notify card issuers immediately if your card is lost or stolen.

Bad Credit Ratings

If you learned that your credit has been damaged, you are authorized under the Fair Credit Reporting Act to request from the credit reporting agency an accurate report showing any information transmitted about your credit standing. If you challenge the information, the agency must re-investigate, and if it still is not resolved, you may file a protest which will remain in the report. You are entitled to sue for damages, attorney’s fees, and investigation costs if the agency does not comply.

Error in Billing

If you think your bill is wrong or want more information about it, notify the creditor in writing within 60 days after the bill was mailed. Be sure to include:

Your name and account number.

A statement that you believe the bill contains an error and an explanation of why you believe there is an error.

The suspected amount of the error.

While you are waiting for an answer, you do not have to pay the disputed amount or any minimum payments or finance charges that apply to it. You are still obligated to pay all parts of the bill that are not in dispute.

The creditor must acknowledge your letter within 30 days unless your bill is corrected before then, Within two billing periods, but in no case more than 90 days, the creditor must correct your account or explain why the bill is correct.

If the creditor made a mistake, you do not have to pay any finance charges on the disputed amount. The creditor must correct your account for the full amount in dispute, or correct your account for a part of that amount and send you an explanation of what you still owe. You then have the time usually given on your type of account to pay any balance. If no error is found, the creditor must promptly send you a statement of what you owe. In this case, the creditor may include any accumulated finance charges and any minimum payments you missed while you were questioning the bill.

If you still are not satisfied, you should notify the creditor within the time you have to pay your bill. However, the creditor has now fulfilled her legal obligation, except for requirements regarding your credit rating.

Once you have written about a possible error, the creditor may not give out information to other creditors or credit bureaus or threaten to damage your credit rating. Before answering your letter, the creditor may not take any collection action on the disputed amount or restrict your account because of the dispute. But a creditor can apply the disputed amount against your credit limit.

After your bill has been explained, and if you still disagree in writing within the time allowed for payment and do not pay, the creditor can report you as delinquent on your account and begin collection proceedings. If this is done, the creditor must also report that you have challenged your bill, and must provide you in writing the name and address of each person and organization to whom your credit information has been given. When the matter is settled the creditor must report the outcome to each person who received information about you.

The Federal law applies to personal, family, and household debts - such as money owed for the purchase of a car, for medical care, or for charge accounts.

Collection Agencies

When your are paying for a product or service over time and get behind on your payments, the loan company or bank may turn your debt over to a collection agency or may handle the problem itself.

Federal law prohibits abusive, deceptive, and unfair debt collection practices, its purpose is to see that you are treated fairly. However, the law does not cancel legitimate debts. A debt collector is anyone other than the creditor and his employees, usually a collection agency employed for the purpose of collecting the debt. A debt collector may contact you in person or be mails, telephone or telegram, but cannot contact you at inconvenient or unusual places or times, such as before 8:00 a.m. or after 9:00 p.m., unless you agree otherwise. Furthermore, a debt collector may not contact you at work if your employer disapproves.

Within five (5) days after you are first contacted, the debt collector must send you a written notice telling you:

the amount of money you owe,

the name of the creditor to whom you owe the money, and

what to do if you feel you do not owe the money.

If you believe you do not owe the money, you should send a letter to the creditor within 30 days after you are first contacted saying you do not owe the money. A debt collector may begin collection activities again only if you are sent proof of the debt.

You may stop a debt collector from contacting you by requesting it in writing. Once you tell a debt collector not to contact you, the debt collector can no longer do so, except to tell you that there will be no further contact. The creditor, however, may continue to contact you. The debt collector may notify you that some specific action may be taken but only if the debt collector or the creditor normally takes such action.

A debt collector may contact any person to locate you; however, the debt collector must only tell people that the purpose is to try to contact you. Once a debt collector knows you have an attorney, the debt collector may only contact your attorney.

The debt collector must not:

tell anybody else that you owe money;

in most cases, talk to any person more than once;

use a postcard to notify you that you owe money; or

put anything on an envelope or in a letter that identifies the writer as a debt collector.

Door-to-Door Sales

How many times have you heard the old warning, "Beware of the door-to-door salesman!"? Even the most strong-willed customer occasionally falls prey to an enterprising door-to-door salesperson. But if the "magic spell" cast by the salesperson wears off as soon as he is out your door with your money or a sales contract, there is something you can do about it.

A Federal Trade Commission (FTC) rule allows you a three day cooling off period to decide whether to cancel your purchase of goods or services. If you do decide to cancel the sale or rescind the contract, you must send or deliver a written notice to the company or business before midnight of the third business day after the date of the transaction.

The FTC rule requires you to sign and date one copy of a Notice of Cancellation form which you should receive from the salesperson along with copies of the sales contract or receipt of sale. You should consider sending the Notice of Cancellation or written letter of cancellation by certified mail with a return receipt requested. Keep a copy of the notice for your records and proof that you sent it.

Once the merchant receives the notice letter of cancellation, he or she has 10 days to refund any money received, return any documents that you have signed, return any goods or property that you’ve traded in, and inform you whether he or she will pick up or let you keep any items that were left with you. Products left with you must be available to the seller in the same condition as you received them. It is not your responsibility, though, to ship the items back to the dealer or pay postage expenses for such shipping. The seller must either pick up items left with you or, if you agree to ship them, the seller must pay the return postage expenses. If the seller fails to demand possession of the items within 20 days after cancellation or revocation, the goods become the property of the buyer without any obligation to pay for them. The FTC rule covers purchases under twenty-five dollars.

Mail Order Merchandise

If you order merchandise by mail, Federal regulations require the seller to ship merchandise to you within the time limits stated in its ad or brochure, or within 30 days if the seller has not specified a delivery period. If the merchandise is not shipped, e.g., because it is temporarily out of stock, you have the right to cancel your order and have your money refunded within 7 days of cancellation. In a credit transaction, the seller has one billing cycle to adjust your account. If the seller notifies you that he cannot ship the merchandise in the stated time or within 30 days, you may (i) cancel the order and get your money back, (ii) agree to the new shipping date, or (iii) not answer, in which case the seller can assume you agree to the shipping delay. If you do not give your express consent to a shipping delay of more than 30 days, the seller must return your money at the end of the first 30 days of the delay. These regulation do not apply to magazine subscriptions, serial deliveries except for the initial shipment, mail order seeds and growing plants, C.O.D. order or credit orders for which your account is not charged prior to shipment.

Unordered Merchandise

You do not have to pay for merchandise that you have not ordered or otherwise requested and it is illegal for the sender to pressure you to return it or send you a bill. It is illegal for a merchant to send unordered merchandise other than free samples and merchandise mailed by charitable organizations requesting contributions.

Any problems relating to mail order dealers or unordered merchandise should be referred in writing to your Postmaster (or local Postal Inspector) and to:

Director, Bureau of Consumer Protection

Federal Trade Commission

Washington, D.C. 20580

Telemarketing Sales

Just about everyone who owns a telephone has received calls promoting products, services, investment opportunities or contests. Although most telephone offers are legitimate, telemarketing fraud costs consumers billions of dollars a year. Federal rules and common sense can protect you from telephone scams and overly intrusive sales calls.

Under FTC rules, telemarketers may call only between 8 a.m. and 9 p.m. They must tell you immediately who they are and what they are selling - before they make their pitch. You can stop unwanted calls from telemarketers by telling them not to call back. If they do, they’re breaking the law.

Before you pay anything, a telemarketer must tell you (i) the total cost of the products or services offered and any restrictions on getting or using them; and (ii) whether a sale is final or non-refundable. A telemarketer may never withdraw money from your checking account without your express, verifiable authorization. It is also illegal for telemarketers to misrepresent information about whatever they are selling, including prize-promotion schemes.

Telephone scam artists may cold call individuals listed in a directory or on a mailing list. In more elaborate schemes, advertisements or direct mail pieces invite you to call a certain phone number to claim a prize or to make a purchase. Be skeptical of any deal that sounds too good to be true, and make sure sellers are trustworthy before you hand them your money.

Here are some ways to avoid being victimized by telephone fraud:

Resist high pressure sales tactics. Legitimate businesses respect the fact that you’re not interested.

Don’t send money--cash, check, or money order--to anyone who insists on immediate payment.

Keep information about your bank accounts and credit cards to yourself unless you know who you’re dealing with.

Hang up if you’re asked to pay for a prize. Free is free.

Take your time. Ask for written information about the product, services, investment opportunity, to charity that’s the subject of the call.

Before you respond to a phone solicitation, talk to a friend, family member, or financial advisor. Your financial investments may have consequences for people you care about.

You can fight telephone fraud by reporting scam artists to the National Fraud Information Center (NFIC) at 1-800-876-7060, 9:00 a.m.- 5:30 p.m., Monday through Friday. NFIC is a private, non-profit organization that operates a consumer hotline to provide services and assistance in filing complaints. NFIC also forwards appropriate complaints to the FTC for entry on its telemarketing fraud database.

For more information about consumer protections under the Telemarketing Sales Rule, write:

Bureau of Consumer Protection

Federal Trade Commission

Public Reference - Room 130

Washington, D.C. 20580

Unscrupulous Practices

Unscrupulous dealers and businesses have many ways of getting you to part with your hard-earned cash. If you’re not careful, you could find yourself paying unreasonably high interest rates for a credit purchase, or stuck with a piece of shoddy merchandise that you were told was "a steal" at the price you paid for it. Unfortunately, bargains and deals that sound too good to be true usually are, and unwary buyers can end up paying for a costly lesson in consumer education.

Scam artists use dozens of cons to fleece unsuspecting individuals. Some of these schemes involve products and services that are commonly purchased by senior citizens. The following are a couple of the more common schemes that you should guard against.

Bait and Switch

The store or business employing the bait and switch technique usually advertises some attractive bargain that is "available in limited quantities" to get you into the store. Once you are there, the sales people try to get you to buy a more expensive item in the same line of merchandise - often by downgrading the bargain model that drew you to the store in the first place. Frequently, the more expensive item is overpriced.

Pigeon Drop

The pigeon-drop is a technique used to rob people - particularly elderly persons - of their savings. Usually a pleasant person introduces himself or herself and says that he or she has recently found a large amount of money. The person offers to share the found money with you, if you will put up some of your own money to show good faith. After you deliver the agreed-upon amount in an envelope, the "nice" person then: (1) distracts you and switches the envelope with your money for one containing paper, or (2) takes the envelope and promises to deliver your windfall "later" or "tomorrow." Tomorrow never comes. These cons sometimes sound believable, but they never are. When in doubt, call the police or the Better Business Bureau to see if they know of a scheme that is being used to victimize others in the community.

Home Repairs

Whenever you need to hire someone to work on your home, use caution and shop around. You do not have to hire the first contractor that you find. Get two or three estimates to see who is offering the best bargain. Also, check references before you hire. Inquire about past complaints or potential problems with a business by contacting the Better Business Bureau in you locality.

After you decide upon a contractor, insist that your agreement be put in writing. If you don’t get all the important things in writing, you’re asking for trouble later on. Items such as price and guarantees of the work to be done should be on paper and signed so that you can avoid arguments after the work is completed. Agree in advance that full payment is not due until the work is completed. A good faith deposit is acceptable, but it should be a small percentage of the total.

If you plan to pay for the work in installments and the contractor or loan company requires a deed of trust on your home as collateral, remember two things: 1) you have three business days after you make the agreement in which to cancel it, if the work has not begun during that time; and 2) if you get behind on your payments, the contractor or loan company can take your home from you by foreclosing on the deed of trust.

If the contractor is not paid after completion of his work, he can file a document known as a mechanic’s lien. If you receive notice that a lien has been field against you property, consult an attorney.

If you have a dispute with your contractor regarding payment for his work, be certain to obtain a release of all liens placed on your property before you make you final payment. If the contractor refuses, consult an attorney before making any further payments. If you don’t have an attorney, the state and local bars can help through their lawyer referral services or by directing you to the nearest Legal Aid office.

Health Quackery

If you have ever been tempted to spend money on products advertised as miracle cures, do not feel embarrassed. Each year, Americans spend billions of dollars on bogus health products and treatments. Tragically, some people are persuaded to buy the useless products rather than to seek effective, proven medical treatment. In order to avoid being a victim of "health quackery", beware of the following:

Promises of a "quick and painless" cure.

Extraordinary promises such as a claim that a single remedy will cure all diseases.

Testimonials of "satisfied users" which lack any substantive medical support.

Products which are described as "alternatives"; some alternative therapists and healers do not follow accepted scientific protocol.

"Scientific breakthroughs" which the promoter claims have been overlooked by the medical community.

If medical science has not found a cure for an ailment, then you should not buy a product advertised to cure it. Remember, if it sounds too good to be true, it probably is.

Consumer Remedies

When something goes wrong with a product you’ve bought, or a repair job is poorly done (on a house, car, or anything else), you can seek satisfaction in a number of ways. A thoughtfully prepared complaint made either in person or in writing can be an extremely effective way of solving a consumer problem - especially when that complaint is made to the proper authority. You can successfully resolve many problems by this method alone.

Complaints are most effective when accompanied by receipts and other documents that help explain your case. If you are contacting the store or business by mail, send your complaint letter by certified or registered mail, return receipt requested, and keep a copy for your records. Never send originals of any receipt, contract, or documentation. If you are making your complaint in person, try to remain calm, but be firm and make sure what you are told makes sense to you.

If taking your complaint directly to the store or business does not produce the satisfaction you are seeking, bring the matter to the attention of the Better Business Bureau in your community or contact the Office of Consumer Affairs.

In some areas, law schools and radio and television stations handle consumer complaints at no charge to you as a public services to the community. These services can be extremely helpful.

Introduction

There are federal laws prohibiting discrimination against anyone because of his or her age. The age discrimination laws cover employment, federal programs, and obtaining credit.

Employment

The Age Discrimination in Employment Act prohibits workplace age discrimination against individuals who are at least 40 years old. While there is generally no upper age limit, employers can set mandatory retirement policies for executives 65 and older who are entitled to pensions of $44,000 or more.

Discrimination in employment can take many forms, e.g., termination, demotion, or denial of employment. If you believe you are being discriminated against because of your age, within 300 days of the alleged discrimination, you should contact the Equal Employment Opportunity Commission (EEOC), 1801 L Street, N.W., Washington, D.C. 20507, (202) 663-4900 (voice) or (800) 800-3302 for TDD. The matter will be investigated, then discussed and settled or, if necessary, a suit may be filed. Federal employees should file complaints with the Office of Personnel Management.

Federal Programs

If you believe you are being discriminated against because of your age in any program receiving financial assistance from the United States Government, you must contact in person or complain in writing to the federal agency that is financing the program. This is an administrative proceeding, and the agency must reply in 180 days. If the agency does not reply within 180 days, you may bring suit in Federal Court to stop the prohibited action once you have given 30 days advance notice to the Secretary of Health and Human Services, the Attorney General of the U.S., and the person or party taking action against you. It probably will be necessary to obtain assistance in making the complaint. These matters can be complicated, and thus you may wish to consult a person skilled in the field of age discrimination or an attorney who handles this type of case.

Credit

The Equal Credit Opportunity Act forbids discrimination against an applicant for credit, not only on the basis of age, but also on the basis of sex, marital status, receipt of public assistance benefits, race, color, national origin, or religion.

A creditor wants to make sure that you are both willing and able to repay your debt. Normal items of inquiry include your personal income, your expense, amount of outstanding debts, and your credit history. A creditor may also ask your age, but the use of this information is controlled under the Equal Credit Opportunity Act. Your age may not be used as the basis for a decision to deny or decrease credit if you otherwise qualify. A creditor may ask you about your income, but continually denying credit to applicants without good cause or arbitrarily discounting income is forbidden.

You have a right to know whether an application is accepted or rejected within 30 days of filing. If you have suffered adverse credit actions such as a denial or revocation of credit, a change in terms of an existing credit arrangement, or a refusal to grant credit in substantially the terms requested, you have 60 days from the time the creditor notifies you of adverse action to request the reason in writing. The creditor must give you a statement of reason within 30 days of the receipt of your request.

If credit has been denied either wholly or partly because of information contained in a consumer credit report, you may request a free copy in writing within 60 days of the initial action. Try to renegotiate the terms or otherwise solve the problem. If the problem has not been resolved to your satisfaction, and you believe the adverse actions was taken for a non-permissible reason, you may bring suit to recover actual damages, attorney’s fees, court costs, and punitive damages in an amount not greater than $10,000.

There are federal and state laws which prohibit discrimination against individuals based upon disability. Generally speaking, federal law defines an individual with a disability in three ways: 1) a person who "has" a physical or mental impairment that substantially limits one or more of the major life activities of that individual; 2) a person who "has a record" of a physical or mental impairment which substantially limits one or more of that individual’s major life activities; or 3) a person who "is regarded as having" a physical or mental impairment that substantially limits one or more of the major life activities of the individual. A "major life activity" is broadly defined to include, but is not limited to, the ability to care for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.

To be considered a "qualified individual with a disability" under the Americans with Disabilities Act (ADA) with respect to employment activities, you must possess the skill, education, and experience requirements of the employment activities, you must possess the skill, education, and experience requirements of the employment position held or desired and be able, with or without reasonable accommodation, to perform the essential functions of the position. If your claim is for this type of discrimination, you should contact the Equal Employment Opportunity Commission (EEOC), 1801 L Street, N.W., Washington, D.C. 20506, (202) 663-4900 (voice) or (202) 663-4494 (TDD) or contact your local EEOC office.

There is an information kit issued by the EEOC that describes the rights of an individual with a disability. Contact the Publication Distribution Center at (800) 669-3362 (voice) or (800) 800-3302 (TDD) to request the kit.

A different part of the ADA relates to the rights of individuals with disabilities to have access to, and to enjoy the benefits, privileges and services of, the programs, activities, and buildings of public entities (state and local governments). If you have difficulties in this regard, you should contact the Department of justice, Coordination and Review Section, P.O. Box 66560, Civil Rights Division, Washington, D.C. 20035-6118, (202) 514-4609.

In a third part, the ADA prohibits discrimination on the basis of disability by public accommodations (private persons or businesses that own, operate, lease or lease to a place of public accommodation) in full and equal enjoyment of goods, services, facilities, and accommodations of any place of public accommodation (for example, hotels, restaurants, shopping centers, retail stores, doctor’s offices, libraries, parks, theaters, and pharmacies). Removal of existing barriers to access to places of public accommodation is required unless removal is too expensive and difficult, in which case alternative means of enjoying and receiving the goods and services must be provided.

The above requirements of the ADA are also substantially required under Section 504 of the Rehabilitation Act of 1973 and are enforceable against any person or entity that receives federal financial assistance.

Grandparents’ rights generally apply to two issues: visitation privileges and custody of a grandchild. While visitation and custody are regulated by state statutes which differ from state to state, these laws demonstrate some general trends.

Visitation

If you are a grandparent and feel that you have been unreasonably denied visitation of a grandchild, your state law may allow you to go to court and petition for such visitation. State laws usually indicate under which circumstances a grandparent may petition for visitation. Generally, these circumstances include the death of the parent(s) or the divorce of the parents. The court will not grant grandparent visitation if it will endanger the child’s physical health or impair the child’s emotional development.

Some state statutes govern grandparent visitation in situations involving the adoption of the grandchild by strangers, stepparent, etc. Because an adoption completely terminates the legal relationship between the child and the birth parents, most courts have ruled that adoption also terminates the child’s relationship with the biological grandparents as well. This is not usually the case when a grandchild is adopted by a stepparent or close relative.

Grandparent Custody

Some states grant custody of a child to grandparents if each parent is deemed unfit or unsuitable to become custodian or if grandparent custody is in the best interest of the child. In these situations, the grandparent must be deemed suitable custodian and must be able to provide an adequate and stable environment for the child. The parent can later regain custody by proving that the cause of the placement with the grandparent no longer exists and that the parent is presently fit for custody. The process for gaining custody for a grandchild varies from state to state. In some states, grandparents must petition the court for custody of the child. In other states, grandparents seek to become guardians of the child.

For more information, you can contact:

The Grandparent Information Center
AARP 601 E Street, N.W.
Washington, D.C. 20049

Your local Area Agency on Aging may also be able to identify services and supports for grandparents with a variety of needs.

The incidents of elder abuse and exploitation in domestic settings nationally are estimated at approximately 1.5 million per year. The reported incidents increased by 94 percent between 1986 and 1991 and are expected to grow in the future. However, only one in eight at risk older individuals receives protective services. The problem is complicated because elder abuse, neglect, and exploitation are sometimes hidden problems which are difficult to address.

What is Elder Abuse?

The term "abuse" is used to describe the act of intentionally hurting someone. Elder Abuse can take many forms. It may be sexual abuse, financial exploitation, emotional abuse or confinement. Elder Abuse may involve physical violence against an older person. It may also involve the deliberate neglect of the medical, health, and nutritional needs of a vulnerable older person.

Signs of Elder Abuse

Elder abuse is often made evident by the following signs:

unusual or unexplained bruises and injuries

signs of confinement

poor hygiene

dehydration

fear

withdrawal

anxiety

hesitation to talk openly

Additionally, the following caregiver behaviors may indicate that a person is abusing or neglecting an older person:

not permitting seniors to speak for themselves, indifference or anger toward an older person;

previous history of alcohol or drug problems;

threatening or insulting the older person.

Financial exploitation may be indicated by:

unusual activity in bank accounts, such as the withdrawal of large sums of money;

exploiter having a power of attorney, when the older person was not competent to have given one;

a refusal by the exploiter to spend money on the older person for health or welfare;

checks and other documents being signed, when the older person is unable to write;

the loaning by the older person of a large sum of money without adequate documentation.

Preventing Abuse

Seniors can help protect themselves from abuse by taking the following precautions:

Become aware of resources for seniors in your community.

Don’t be isolated; stay in touch with as wide a range of people as possible.

Make regular visits to a trusted physician and let him or her know your concerns and desires regarding possible health or social problems.

Consider using community resources rather than depending on individual caregivers if you feel vulnerable to exploitation.

Put your wishes in writing regarding finances and personal care.

Do not sign anything that you don’t understand. Get help from a lawyer, social worker, or other adviser.

Reporting Abuse

There are laws which protect the elderly from abuse. However, these laws are of little use if incidents of abuse remain unreported. If you are aware of any signs of abuse in a neighbor, friend or relative, you should immediately contact your local adult protective services office or your Area Agency on Aging (AAA) for help. If you suspect the abuse of an elderly person in a nursing home or long term care facility, you should contact your local or state Ombudsman.

When a legal dispute arises, the party who has been injured or damaged (the plaintiff) files his or her law suit against the alleged wrongdoer (the defendant) in a state court or in some more restricted instances, in one of the federal district courts. These lawsuits are tried in the ordinary course, which often means that the resolution of the dispute is delayed and, depending upon the facts involved, may be relatively expensive. Court dockets are often crowded and each suit has to wait its turn before trial occurs. Of course, each case has to be prepared and proper preparation can result in considerable delay and cost to the client. As a result, most federal district courts in the nation and many state trial courts, have procedures to speed the resolution of law suits. These process are commonly referred to as "alternate dispute resolution" procedures. Two of the most popular alternative dispute resolution procedures are arbitration and mediation.

Arbitration

For many years, binding arbitration has been a recognized procedure for resolving disputes. It involves the selection of a single arbitrator or a panel of three arbitrators who hear and decide the case. They are not judges but they act as judges as they decide which side wins and which side loses. The main advantage of arbitration is that delay and expense if often reduced. One of the principal disadvantages of binding arbitration is that an appeal from an arbitration award is very restricted and, as a practical matter, so restricted that often there is no ground for an appeal. Although arbitration speeds the resolution of the dispute, the fact that grounds for appeal are restricted is often criticized.

Mediation

Mediation is a relatively new procedure which also reduces delay and expense and at the same time avoids the disadvantages of binding arbitration. The mediation of a case is conducted by a neutral mediator whose task is to guide the parties and their attorneys to a mutually acceptable settlement of the case. The mediator is not a judge or arbitrator and has no power to decide who wins or loses. Mediation is thus entirely different from a trial or the hearing of a case by a judge or arbitrator(s). The parties are in control of their case inasmuch as they have the right to decide upon a mutually acceptable settlement or to refuse to settle. If the parties do not agree to a settlement, the case stays on the court’s docket for trial in court. Mediation is usually successful i.e. a settlement results, but sometimes mediation results in an impasse (no settlement). The expense is usually considerably less than the expenses of a trial and usually less than the expenses of an arbitration. Mediation has become popular, and approximately 75 percent of the cases which are mediated result in a mutually acceptable settlement. A mediation is non-binding, i.e. the parties themselves decide the result of the mediation. It is confidential. It is informal. The various states which provide for mediation, require that mediators undergo formal training. The usual training requires 40 hours for the training of a general civil mediator and certain additional hours for the qualification of a family mediator. Mediation of family disputes i.e. divorce, child custody, etc. is often more desirable than the trial of such cases. But mediation is not restricted to family disputes. It is frequently used in other civil cases, with success. The parties usually have the right to mutually select the mediator. Information can be obtained from the office of your local bar association, the administrative office of your local state court system or the clerk’s office of your local U.S. district federal court.

Financial Assistance

Social Security Administration
1-800-772-1213

Pension Rights Center
918 16th Street, NW Suite 704
Washington, DC 20006
(202) 296-3776

Department of Labor
Pension and Welfare Benefits
Administration Room N 5619
200 Constitution, NW
Washington, DC 20210
(202) 219-8776

Health Care

Alzheimer’s Association
919 North Michigan Avenue
Suite 1000
Chicago, IL 60611-1676

American Hospital Association
One North Franklin
Chicago, IL 60606
(312) 422-3000

(Put It in Writing: A Guide to Promoting Advance Directives. Provides materials and guidance for hospitals on issues related to ethics, death and dying and medical decision-making.)

Medicare
1-800-638-6833

Department of Health and Human Services
Health Care Financing Administration (HCFA)
7500 Security Boulevard
Baltimore, MD 21244
(410) 786-3151

Long Term Care

American Association of Homes and Services for the Aging
901 E Street NW, Suite 500
Washington, DC 20004-2037
(202) 783-2242

American Health Care Association
1201 L Street, NW
Washington, DC 20005
(202) 842-4444

(A professional organization representing nursing homes, assisted living, and subacute care facilities. May be contacted for educational and consumer materials on long-term care.)

Legal Information

American Bar Association
Commission on Legal Problems of the Elderly
740 15th Street NW
Washington, DC 20005-1009
(202) 662-8690

Legal Counsel for the Elderly
601 E Street NW
Washington, DC 20049
(202) 434-2120

National Senior Citizens Law Center
Suite 700
1815 H Street NW
Washington, DC 20006
(202) 887-5280

Other Helpful Contacts

American Association of Retired People (AARP)
601 E Street NW
Washington, DC 20049
(202) 939-3910

American Society on Aging
833 Market Street, Suite 512
San Francisco, CA 94103
(415) 882-2910

Bureau of Consumer Protection
Federal Trade Commission
Washington, DC 20580
(202) 326-2222

Choice in Dying
200 Varick Street
New York, NY 10014
(212) 366-5540

(Non-profit organization providing materials discussing issues of death and dying. Can provide state specific information on advance directives.)

National Center on Elder Abuse
Research and Demonstration Department
American Public Welfare Association
Suite 500
810 1st Street NE
Washington, DC 20002
(202) 682-2470

National Council on Alcoholism and Other Drug Dependencies
(212) 206-6770

National Meals on Wheels Foundation
2675 44th Street, SW, Suite 305
Grand Rapids, MI 49509
(800) 999-6262