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As the life expectancy for Americans lengthens and the country grows grayer, trusts and estates lawyers say they’re seeing the demographic impact in the world of estate planning.

Donna R. Bashaw, who practices in Laguna Hills, Calif., had a client who went ballroom dancing three nights a week at the age of 103 – three years before he died.

And attorney Don Rosenberg of Troy, Mich. has a 107-year-old client and many in their 90s – including one who recently broke his hip after falling from a ladder while cleaning the gutters on his house.

“I’ve had two who have made it to 105,” said Robert Freedman, who practices in New York City. “Nobody’s made it to 106 yet, but it’s only a question of time.”

The National Institute on Aging predicts that the number of people at least 65 years old will double in the next 25 years to some 72 million people. Today, the fastest growing age group in the U.S. is what demographers call the “oldest old” – people 85 and older – and their numbers are also expected to double in the next 25 years, to about 10 million.

The U.S. Census Bureau says that about 70,000 centenarians now live in the U.S., and predicts that by 2040 there will be 580,000.

Not long ago, the concept of living out the final years of one’s life was a simple matter. At age 65, people would retire with the expectation that they’d die in a few years and leave an inheritance to their children.

“But now there’s this big span of years after retirement,” said Kate Vetrano, an attorney in King of Prussia, Pa., who was the chair of the ABA Family Law Section’s elder law committee for 13 years. “I’m seeing more and more people who, as they reach retirement, see many healthy years ahead of them, and they’re making decisions that are quite different than the ones that their parents and grandparents made.”

Dementia on the rise

The people approaching and entering retirement now are Baby Boomers. In January 2006, the first of the nation’s 78 million Boomers turned 60. And many of them are visiting trusts and estates lawyers with a dual purpose in mind: planning for their parents and planning for themselves.

Often, said Rosenberg, a Boomer’s 80-something parent is facing a medical or mental health problem that needs legal attention.

“I’ve got a lot of people who were in their 60s and 70s when I started my practice in the early ’80s who are now in their 80s and 90s,” Rosenberg said. “And now it’s their children who are coming in and saying that mom needs to go into a nursing home or she broke her hip, or dad had a stroke or he’s got dementia.”

According to Rosenberg, dementia is a particularly acute problem. He estimates that half of the 85-year-olds he sees have Alzheimer’s, which has serious implications for how estate planning for them is done.

“You don’t want a person with dementia making medical and financial decisions, so you need to change the estate planning documents,” he said.

Freedman agreed that this is a problem.

“When you get over 85, the likelihood of some kind of mental incapacity greatly increases,” he said. “So you focus on advance directives, health-care proxies, medical powers of attorney, financial powers of attorney, living wills.”

Lawyers say that in the process of planning for their parents, Boomers often begin to take a hard look at their own retirement planning.

“It’s a wake-up call for them,” said Rosenberg.

Seeing the issues that affect their parents, many Boomer caretakers are crafting plans that encompass asset protection and long-term care insurance.

“Many people who retire at 65 have life expectancies of at least 20 more years, and that’s a long time,” Freedman said.

Bashaw says she advises clients to think about “how they’re going to pay for their own last years. We used to say a good time to start is in your 60s, but more and more people are doing it in their 50s now.”

Some Boomers may need to work longer to save the money they’ll need for their extensive golden years, she said. The last years of life can be very expensive, and they can reduce or even eliminate the inheritances that people want to leave to their children.

Reaching the end

Another question estate planners must discuss with their clients is how to address end of life issues.

“The law [stands] between the living and the letting go,” said Neil E. Hendershot, a lawyer with the Harrisburg, Pa. law firm of Goldberg Katzman. “The law hasn’t really addressed the ‘letting go’ part; it hasn’t had to step in and say, ‘That’s enough medical treatment.’”

He pointed out that the U.S. Supreme Court has made clear – in Cruzan v. Director, Missouri Department of Health, 497 U.S. 261 (1990) and its refusal to accept certiorari in the Terry Schiavo case – that it “doesn’t want to have anything to do with these end-of-life decisions.” And most state courts feel the same way, he said.

That’s why clients need to spell out their wishes clearly.

Rosenberg said the single most important document for clients to have is a durable power of attorney for both financial and health care matters. The durable power of attorney provides that when the individual can no longer make his or her own medical care and financial decisions, a designated loved one would make those decisions – including desired end-of-life decisions – instead.

“A cadre of lawyers will be focusing on [these] issues,” Hendershot said. “There are going to be significant developments in the next 20 years to accommodate this population.”

Questions or comments can be directed to the writer at: dick.dahl@lawyersusaonline.com

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