Thursday, April 16, 2015

Regulations Proposed to Protect Retirement Accounts

Federal regulators have proposed rules intended to protect investors' retirement savings accounts from investment planners who do not always act with their customers' best interests in mind. Drawing on academic research, the White House has found that lack of investor protection has cost investors $17 billion annually. Proposed rules would close some of the loopholes which allow brokers to avoid taking on fiduciary responsibilities when giving advice on retirement accounts.

These rules would would update the Employee Retirement Income Security Act, which was enacted in 1974, when many retirees could still rely on pensions. Today, retirees are increasingly dependent on a 401(k). They become especially vulnerable when they turn a 401(k) account, previously managed by their employer, into an individual retirement account. Brokers who advise them on that transaction do not necessarily have to act with their customers' best interests in mind; this can lead to the loss of thousands of dollars for retirees who may end up paying higher commissions as a result. Erisa, as it is currently written, does require that brokers act according to a fiduciary duty when dispensing advice, but "advice" is narrowly defined. The proposed rules would broaden the meaning of advice to include any professional receiving compensation for providing individualized advice.

Tuesday, March 3, 2015

Federal Government to Change Nursing Home Rating Determinations

The federal government recently announced that it will soon become more difficult for nursing homes to earn coveted four- and five-star ratings. Currently, homes are rated on a scale from one to five; their scores are made available to the public on this website. The rating system has been criticized in the past, with its detractorts claiming it relies too heavily on unverified data provided by the nursing homes themselves and not audited by the government.

Nursing homes in response have expressed concern that the new rating system will send the wrong message to customers, with one representative stating that if scores plummet suddenly under the new standards, patients and their families will think that quality has declined, even if the homes have actually improved.

Friday, February 20, 2015

Moments of Lucidity and Legal Capacity

One particularly tricky patch of terrain that attorneys who deal with older clients must navigate is determining when "moments of lucidity"can support a finding of "legal capacity." One law professor exhorts attorneys to exercise caution, noting that they "may spend too much time being impressed by a client's ability to remember who is the president or the names of their children, and too little time asking more probing questions."

Assessing in these situations can be difficult, especially when clients still in the early phases of dementia can suffer from impairments that are not easily recognizable. Fortunately, there are handbooks available put together through a joint effort of the American Psychological Association and the American Bar Association for determining a client's legal capacity, one dedicated to attorneys, one to psychologists, and another to judges.

Wednesday, January 21, 2015

New Jersey Considers "Aid in Dying" Bill

Last November, the New Jersey state Assembly passed an "aid in dying bill" with a 41-31 vote. The bill was sent to the full Senate in December by the Senate health committee, but with no recommendation on whether to enact it. The bill would allow terminally ill patients (those diagnosed with having six or fewer months left to live) to obtain medication they could self-administer to end their lives. The bill would require a patient to make two oral requests at least fifteen days apart from his or her attending physician along with an additional written request. A consulting physician would also have to sign off. As another precautionary measure, there would have to be at least one witness to the request who is neither a relative nor a beneficiary of the patient's estate.

Governor Christie has expressed his own concerns about the bill, stating that it could lead to a "slippery slope." Historically, Christie has been against such "aid in dying" laws, opposing the concept in his 2009 and 2013 runs for governor.

New Jersey Assemblyman John Burzichilli, D-Gloucester, a main proponent of the bill, said that discussions were continuing in the Senate and that the bill was"very, very close" to having the majority required to pass. If it does pass, though, it will still not have a veto-proof majority and will require Gov. Christie's signature--an unlikely event in the short-term given his public doubts about the bill.

Were the bill to become law, New Jersey would join five other states which have so far legalized such "aid in dying" laws. 

Wednesday, October 22, 2014

Possible Effects of New Scientific Research on End-of-Life Cases

Scientists at the University of Cambridge have discovered that some patients diagnosed as being in a persistent vegetative state can have "hidden brain signatures" of consciousness, even when the patient has the appearance of being in an unconscious state. 

Specifically, the study found the following:

"Although unable to move and respond, some patients in a vegetative state are able to carry out tasks such as imagining playing a game of tennis, the scientists note. Using a functional magnetic resonance imaging (fMRI) scanner, researchers have previously been able to record activity in the pre-motor cortex, the part of the brain that deals with movement, in apparently unconscious patients asked to imagine playing tennis."

Scientists hope to use this "tennis test" to figure out which ostensibly vegetative patients may in fact have some conscious awareness. This may be a new consideration to take into account in the writing of advance directives. 

Wednesday, September 24, 2014

Putting a Price on Priceless Art for Your Estate Plan

This week’s Wall Street Journal covers a topic all of us have probably worried about 
sometime or other: how to account for a $10 million Rembrandt in our estate plan. Fortunately, there are steps to take to ensure that our wishes are met and our tax burden is minimized. First off, one must be careful not to sidestep the law. If beneficiaries simply walk into a decedent’s home and pull artwork off the wall before an estate clears probate, they can be held criminally liable.

Another item to bear in mind is that one must account for the value of artwork when designating beneficiaries. For example, if half of your $20 million estate is that $10 million Rembrandt, and you choose to leave it to Susie and the rest of your estate to Charley, Charley may get stuck with a tax hit for the painting. In a case like this, the will should specify that each party must pay his or her share of the estate tax.

For a more in-depth treatment on the matter, you can consult the article here.

Wednesday, September 10, 2014

A New Estate Tax Proposal to Address Wealth Inequality

          Bernie Sanders, an independent senator from Vermont, has published a new opinion piece in the Huffington Post addressing the need for increased estate taxes for the wealthiest Americans. Sanders believes that new estate tax laws are needed to reduce income inequality in the United States, and he cites a number of statistics to support his cause, such as the fact that the top one percent owns about 37 percent of our nation’s total wealth, while the bottom 60 percent owns only 1.7 percent. In addition to wealth disparity, Sanders points out that income gains have unevenly benefited the already affluent, with 95 percent of all gains going to the top 1 percent since 2008.

Greater estate taxes on the rich, Sanders argues, would not only reduce wealth inequality, but lower the national debt and raise money for investments in infrastructure and education. His proposal includes a tax rate of 40 percent for estates worth over 3.5 million, 50 percent for estates worth more than $10 million and less than $50 million, and 55 percent for estates worth more than $50 million. Additionally, there would be a billionaire’s surtax of 10 percent, which would be applicable to the less than 500 American families whose combined wealth totals over $2 trillion. The first $3.5 million of an individual’s estate would be exempt from taxes, meaning that 99.7 percent of Americans would not have to pay an estate tax.