That’s Where the Money Is

In 20 years the population that will require nursing home care will have grown almost 300%.  What do you think the chances are that there will be enough attorneys who specialize in the area of elder law and special needs trusts to adequately deal with the health care leviathan that is the baby boomer generation?  With the legal job market being the most difficult it has been for new attorneys in the last 30 years; does it not makes sense that new attorneys should be looking into nontraditional areas that have a real potential for growth and development?  Personal injury will always be around but there are more personal injury attorneys, than are actually needed.  Public defender and state attorney’s are always needed, but with the skyrocketing cost of student loans and inflation in our economy the 35-40,000 dollar a year salary may just not be feasible.  Why won’t new attorneys stop, take a look around, and ask themselves where there is the greatest need?   It’s as if the new attorneys are fireman who just got the call about an emergency that requires their help.  They hurry down the street to see a nursing home on fire on one side of the road with only one or two fireman putting out the blaze and on the other side of the road there is a kitten stuck in a tree with 100 firemen already attempting to pry the cat down.  The fireman already helping the cat also have TV commercials and their pictures painted on buses and billboards.  Which side of the road has the best chance of a new fireman getting some real life practical experience in their profession?  Which side allows the greatest possibility of getting personal satisfaction in helping someone?  Which side do you believe is going to be more grateful to you?

There are only a few areas of law that have the potential for growth that elder law has, and none of them in my point of view can be as personally rewarding.  Being able to sit down with a family and help them to develop a plan for their future.  All of this while still being fairly compensated sounds too good to be true.  Now I know that developing wills, trusts, and having to deal with Medicaid and tax issues is not as sexy as say litigation, but look at how many personal injury cases actually go to trial.  How many of those cases are being handled by someone who is just starting out?  If you are still convinced that litigation holds all of the excitement you believe that you need, then go and actually talk with a litigation attorney, or better yet spend a day at the court house watching the streams of people go in and out.

If you believe that you were meant to work as legal counsel for a large firm that is great, but do you really know what the typical work of day of an attorney at one of those large firms looks like?  Once again go talk with an attorney who actually does work at one of those firms and then ask yourself if spending 70 hours a week doing discovery requests for the possibility of one day, 5 years from now becoming partner is worth it.  I am over generalizing, and I know both personal injury litigation attorneys and large defense firm attorneys who are happy with the work that they do, but I know for a fact that they are the exception to the rule.  It is time if you have either just started law school or has been out of school practicing for a couple of years to really ask yourself what it is that drives you.  I asked myself that question and found that I have always been involved with helping people whether it is the disabled or the less fortunate than me.  I at the same time have a young son who I must provide for as well as a mountain of student loan debt along with other financial obligations.  I am also not strong willed enough to be a social worker or public defender, but what I can do is empathize and talk sincerely with people.  I am genuinely concerned with helping people with their problems and what better way to help them than to make sure that their family will be financially protected for the future?  If we cam have more attorney’s who feel the same way that I do get involved and focused in the area of elder law than we will be able to solve a lot of the upcoming problems facing that baby boomer generation before it is too late!  It is not rocket science.  The famous bank robber Willie Sutton is known for having said, when asked why he robbed banks, “because that is where the money is.” http://en.wikipedia.org/wiki/Willie_Sutton The children of the greatest generation that ever lived needs our help and we need theirs and the best way to do that is to work together in securing their future by utilizing the skillful practice of elder law.

You have just turned 65 years old.  You retired two years and have just started collecting social security.  You have a 401k with around $100,000.00 and a monthly house payment of around $700.00 a month.  Also, let’s say your spouse passed away 5 years ago and left you with a few thousand dollars that you used to make small repairs around the home.  You are collecting $1,000.00 a month in Social Security and can draw around $300.00 a month out of your retirement and still feel comfortable with it lasting you at least 10-15 more years as long as no catastrophic problems come up.  However there is the issue of leaving something behind for your family and also at the moment you are relatively in good health and are only spending a couple of thousand dollars a year on checkups and routine visits to the doctor.  I am sure that you can probably see where I am going with this setup.  The question that I have does not deal with a catastrophic event changing all of your plans, but rather the simple inescapable fact that with age comes the need to see the doctor more frequently.  An article published by CNN explaining the loopholes that are found in the new healthcare law for Baby Boomer’s mental and substance abuse well-being are really staggering.  The article quotes from the American Medical Association (AMA) website that, “The statistics are staggering. By age 65, around two-thirds of all seniors have at least one chronic disease and see seven physicians. Twenty percent of those older than 65 have five or more chronic diseases see 14 physicians – and average 40 doctor visits a year. Situations like these are a nightmare for patients and the physicians who treat them. Variations in therapies, medications and even differing instructions can be confusing, conflicting and hard for patients to remember.” http://thechart.blogs.cnn.com/2012/07/10/iom-elderly-need-better-access-to-mental-health-substance-abuse-care/?iref=allsearch

We all know how devastating, costly, and visibly debilitating a heart attack or stroke can be, but what about a Baby Boomer who has developed Dementia?  With a major event the immediate medical bills and medication can be expensive, but with a chronic mental or substance abuse problem the cost can become even more costly as the need for constant supervision and care is needed.  That means more time from nursing staff, family members, and time at the doctors.  If there is one positive however, is that unlike a heart attack or strokes the onset of mental or substance abuse problems generally take longer and planning can be done.  I am not saying that you should wait until the signs are there, but in terms of wanting to preserve something for your family and the governments five year look back rule you may have more time to protect your assets before the larger bills start to become due.  By starting to plan today by establishing a will and possibly a trust to protect your assets you can plan for the expected as well as the unexpected should it occur.  Estate planning is not the same thing as life insurance were you hope you never really have to use it but you have it just in case.  Estate planning should be done by everyone, not just the extremely affluent, because in the end we all will get older, we all will have to pay taxes, and we all want to leave something behind for our loved ones.  The only difference will be the steps that we took to make sure that what we worked so hard to obtain will be left for the people we love and care about.

I recently came upon a podcast that I personally found compelling.  I am always  looking for new and interesting topics of discussion to listen to as I attempt to occupy my time driving between Columbus Ohio and Lexington  Kentucky on a weekly basis.  I have already exhausted the entire solo attorney field and what things to do in preparing to start your own law firm.  I will discuss those functional topics as I approach my final year of law school.  But for now I wanted to discuss a topic personally fascinating to me.  Last week I decided to do a search on yahoo of the best podcasts that were available.  A website brought me to a list categorized by theme and I found myself being drawn to the subject of history.  I have always been a history nerd and had things gone a different way I easily could have seen myself pursuing a career as a history professor.  Nevertheless, I have always had a passion for the social interaction and development of society through the vast array of events that have occurred through history.  My search of the best history podcasts kept bringing me to “Hardcore History” hosted by Dan Carlin.  Here is his Wikipedia link http://en.wikipedia.org/wiki/Dan_Carlin for those who are interested in getting some background on the author.  Whatever you thoughts or feelings about Dan’s political views the hypothetical subjects that he poses are some of the most inspired and thought provoking that I have come across in my short time being a student of history.  On my most recent trip from Columbus I found myself listening to his podcast entitled “Old School Toughness”, and it got me thinking of the application of the question that he poses on the Baby Boomer Generation and their legal needs in the future.  The premise of the show is basically the events that occur through a civilization or society’s history is what ultimately develops their toughness and that once that particular society’s toughness has propelled it to a level of comfort and wealth there starts to be a steady decline, the speed of which is wholly specific to that particular society.

What I began to wonder is if the US has already reached its peak of toughness through the blood and sweat of our grandparents and we are on the decline, what legal protections will need to be in place in order to slow down the dissipation of wealth from one’s own estate.  As most of us will agree, the idea that programs like Social Security, Medicaid, Medicare, etc. will be able to completely provide for future generations, let alone the 70+ million of the baby boomer generation, has long since been abandoned.  While the idea of our government having the means to provide for the Baby Boomers becomes more and more of an afterthought, individuals scramble to protect what they have worked so hard to obtain so that their families might have a higher standard of living that our great grandparents had.  Many Baby Boomer’s are looking at the real prospect of having to continue to work well into their 70’s if not full time then at least part time precisely because of the changes to government programs and of the cost of living.

Will you be able to pay for health insurance?  Will you be able to keep supplement your Social Security with an amount that will be consistent with a living wage that keeps up with inflation?  Will what you have earned and saved up to this point be protected through a will or a trust that will make sure that your family is provided for after you are gone?  I pose these questions for two reasons.  One, because both of my parents are Baby Boomers and are reaching retirement, albeit in two completely different situations and two if there was tool for estate planning for the Baby Boomer generation what would you suggest.  There are several tools in an estate attorney’s bag and based on the client’s situation and circumstances each tool must be brought out to deal with that specific problem.  What I am wondering is if the proverbial crap hits the fan as it did with my grandparents, who went through two world wars, the great depression, and disco, what would have to be the one thing that every Baby Boomer would need in order to protect themselves and why?  As many Baby Boomers are middle class Americans with 2.5 kids, 5 grandkids, and average to below average amounts of wealth and do not require elaborate trusts for their protection.  What then is the first thing that an estate attorney would need to know about a client in order to see if they are positioned to confront the upcoming tough times and what steps they may need to take to toughen up?

One current article that I came across comes from estate attorney Bonnie Lawston from New York and her short article, “Protecting Your Assets and Estate as you Age”.  Bonnie has several free articles discussing several critical issues that Baby Boomers are facing as they reach retirement.

http://www.hg.org/article.asp?id=27644

In thinking about these questions I decided to pose them to a few baby boomers that I know and see what they believed to be some of the more important issues that they would want to take care of, first and foremost.  Now to the best of my knowledge these people are not millionaires or have large amounts of disposable income, but I would think they do represent the majority of the baby boomers today:

“For me the concern I have is not going into a nursing home but I would like to leave a little money to my son and his grandchild.”

“I want to leave some money behind to my favorite charities.”

“If I have to spend down my money to qualify for Medicaid it had to be spent several years Before I qualify , or the government can go back to get it, how many years?”

“If I never go into a nursing home what is the best way to shelter my money?”

“I am not opposed to paying taxes for my share just will need assistance,   especially when I am not as sharp as I am now! It is good to just have the opportunity to discuss these concerns.”

I would imagine that for a majority of the Baby Boomers these are some of the top concerns.  Therefore I believe that almost everyone should initially have a professionally done will. A well done will and not one done through a template purchased at Office Depot will not only establish who and what amounts the person’s assets go to but will also provide peace of mind in knowing that they will not be burdening their loved ones or favorite charities with additional legal fees after they are gone.  In terms of Medicaid and the spend down, I believe the number of years that the government is able to look back is three years, but every situation is different and based on who you want to administer this money that you are giving away while you are still alive and who is going to be receiving these assets than either a revocable or irrevocable trust may be suitable for you and your situation.  As the last quote from the Baby Boomers shows that it is more than anything about having piece of mind about your monetary legacy, because after all, life is already difficult enough without having to worry about what is going to happen after you are gone.

So in my practice that is where I will start.  With an open conversation about what is really important to my client.  I learned this approach several years ago when I was a financial advisor and the teachings of my company where that of the “trusted advisor.” Being able to really drill down to what is most important to your client is the goal of providing your client with excellent service.  Yes, your client wants to protect their money, but why?  They want to not have all of it tax and leave some for their kids.  Well why do you want to leave money to your children? Because my parents were not able to leave anything for me and I would like to live the rest of my life with a feeling of inner peace in knowing that one day I will be able, through my hard work and sacrifice, to provide economic relief to the people I love.  People don’t want to protect money just to protect money, they want to protect money to provide an education for their grandchildren so they can have a better life than they had.

My name is Matthew Smith.  I am a 3L part time law student at Salmon P Chase College of Law in Northern Kentucky.  I am a nontraditional law student in that I have close to 8 years of previous professional work experience.  This experience mostly focused on helping planning, coaching, and administering financial and benefits plans for people with special needs, other professionals, and retirees.  I have a 5 year old son David Henry and I live in Lexington, KY.  The reason that I started this blog, was that upon my graduation from law school I plan on staring my own law firm with my partner, where we will be focusing our practice in the area of Estate Planning, Medicare, Medicaid, Social Security, Special Needs and Personal Injury.  My  partner and I having extremely strong family values and wanting to look after our own parents determined that where our true passioned lied was in helping the largest growing population of our country.  This immediate need to further educate the baby boomer generation on the important legal issues that they may face in the coming future was the impetus of me starting this blog.  That being said I am NOT AN ATTORNEY AND AM NOT GIVING LEGAL ADVICE.  What I am hoping to accomplish is to talk about a few important legal issues every week that are facing both baby boomers and attorneys who are either already practicing or are thinking about practicing in this field.