The Bench & Bar magazine is published to provide members of the KBA with information that will increase their knowledge of the law, improve the practice of law, and assist in improving the quality of legal services for the citizenry.
Issue link: https://kentuckybenchandbar.epubxp.com/i/132126
FEATURE: KENTUCKY'S ELDER LAW the demands of caring for an ill or disabled veteran. A veteran may be entitled to other benefits such as home health care benefits or skilled nursing care benefits. There are also special benefits for blind veterans. All of the aforementioned programs have specific eligibility criteria. Another program offered by the VA is the Home Improvements and Structural Alterations (HISA) Grant. The grant offers up to $6,800.00 to a veteran with a service connected disability, or $2,000.00 to a veteran with a non-service connected disability, to make a veterans' home more accessible. This generally includes building ramps, widening doorways, raising or lowering sinks or counters, and improving electrical or plumbing for medically sustaining equipment. 7 The VA also has a Pension Program for veterans and their surviving dependents, such as a spouse or disabled child. This pension benefit is often referred to as "Aid & Attendance," although that is not technically correct. The program pays monthly cash benefits to wartime (as defined by the VA) veterans suffering from a nonservice connected disability. If the veteran is deceased, their surviving dependents may be eligible to receive a pension benefit. 8 24 The Pension Program is a means tested program for persons who have limited income and limited assets. Many elderly or disabled veterans are considered to have low income because their out of pocket medical expenses are more than their income. The cost of assisted living and similar facilities are considered medical expenses. The VA does not provide a strict dollar amount in order to determine whether a veteran is "over resourced." Instead, it has a guideline based on age, marital status, income, medical expenses, and other factors. Thus, the amount of assets a claimant is allowed to have and still qualify for the benefit varies. B&B; • 05.13 The benefit amount varies depending on many factors, including the claimant's income, medical expenses, and level of disability. There are three levels of disability. The first is referred to as the "base level" and is the actual pension. One meets the base level by either obtaining a high enough disability rating through the VA, or by being at least 65 years of age. In addition to the base pension, additional amounts may be added to the benefit for "special monthly compensation" in the form of a Housebound Allowance or an Aid & Attendance Allowance. A claimant is homebound if he/she cannot leave home alone. A claimant is in need of aid and attendance from the loan balance can conceivably grow to exceed the value of the home; however, the borrower is generally not required to repay any loan balance in excess of the value of the home. Reverse mortgages generally have higher costs associated with them than a home equity loan or line of credit. The vast majority of reverse mortgages are insured by the Federal Housing Administration (FHA) as part of its Home Equity Conversion Mortgage (HECM) Program.9 The Consumer Financial Protection Bureau conducted a study on reverse mortgages and reported its findings in June 2012. The key findings included that reverse mortgages are complex and difficult for consumers to With the millions of baby boomers entering the senior population, and the 80 and older population growing by leaps and bounds, one can expect changes in the way seniors live and fund their long term care needs. ment of taxes and insurance. Spouses of borrowers who are not listed as co-borrowers may well have no idea they are at risk of losing their home. If the borrowing spouse dies or needs to move, the non-borrowing spouse must sell the home or otherwise pay off the debt.10 The market for reverse mortgages has been small, but that could well change with the millions of baby boomers coming along and reaching the age of eligibility for reverse mortgages. There are concerns with the cost and complexities of these mortgages and with the trend toward persons taking out this type mortgage before age 70 and taking all available loan money upfront in one lump sum. No doubt, some of these people will outlive their monies. Clearly, there needs to be a careful analysis of the individual's needs and past spending habits when considering this option. another person if he/she needs help performing ADLs. The VA pension benefit with an Aid & Attendance Allowance offers the possibility for the largest monthly benefit, up to $2,054 per month. REVERSE MORTGAGE A reverse mortgage is a special type of home loan for older homeowners. It requires no monthly mortgage payments. The homeowner/borrower is still responsible for payment of property taxes and homeowner's insurance and must live in the home as their primary residence. This type of mortgage allows someone age 62 and older to access the equity they have in their homes and defer payment of the loan until the point in time when they die, sell or move out of the home. Any existing mortgages on the home must be paid off at or before closing on the new reverse mortgage. As there are no required mortgage payments, the interest on the loan is added to the loan balance each month. In view of this, understand and that borrowers are taking out loans at younger ages than in the past. In fiscal year 2011, nearly half of borrowers were under age 70. Also, borrowers are withdrawing more of their money upfront than in the past. In fiscal year 2011, 73 percent of borrowers took all or most of the available funds upfront at closing. Many used some of the monies to pay off existing mortgages. As of February 2012, 9.4 percent of borrowers were at risk of foreclosure as a result of nonpay- OLDER AMERICANS ACT The Older Americans Act (OAA) of 1965 is legislation with an expansive vision for helping older Americans. It was the first federal level initiative to focus on the comprehensive needs of older adults, not just medical care.11 The OAA was designed to build an infrastructure for community based services, specifically designed to provide support and care to older adults so they can live independently in their environment of choice for as long as