What are Benefits of Pre-Planning My Funeral?

Yahoo Life’s recent article entitled “Should You Pre-Pay for Your Own Funeral as Part of Estate Planning?” says there are major benefits to pre-planning and even pre-paying for a funeral now—no matter what your age or health status.

Most deathcare professionals agree that funeral pre-payment has valuable benefits for people of all ages and health statuses.

A major benefit to pre-planning and pre-paying is the emotional support and relief they offer family members and friends.

Maggie McMillan, vice president of the Los Angeles-based Wiefels Group and All Caring Solutions Cremation and Funeral Services, explains that “if and when the unexpected happens, you want everyone to already know what your wishes are, because that will make it easier when hard emotions inevitably come up after you are gone.”

Knowing that your family is prepared and taken care of with prepayment can also help alleviate your own stress and better your mental health.

Another plus of pre-paying for your funeral is that, depending on what method of pre-payment you get, you can often lock in a price guarantee on services and merchandise based on current pricing on the day that you plan. This can protect your family from industry inflation and price fluctuation.

Funeral costs double every decade, on average. Therefore, if you’re looking at pre-paying for a service that costs $3,000 today but didn’t pre-pay and pass away 10 years later, your fees might be upwards of $6,000 for the exact same service.

For some people, all aspects of pre-planning and paying may not seem the right option.

For instance, a plan that isn’t transferable to different states doesn’t make sense for individuals who move around frequently.

In that case, talking to loved ones about what your final wishes are (including where you’d like to end up, and the disposition method) would be a relief for them, in case the unthinkable happens.

Reference: Yahoo Life (Feb. 17, 2022) “Should You Pre-Pay for Your Own Funeral as Part of Estate Planning?”

 

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Is Your Incapacity Plan in Place?

Wise incapacity planning usually includes the execution of a power of attorney.

This is a document that appoints an agent who can legally sign checks, pay bills and make other financial decisions on your behalf, as the principal, in the event incapcity by illness or an accident.

A power of attorney is also used when the principal is unable to be present to sign necessary documents.

The designated agent can be given broad legal authority or limited authority to make decisions about the principal’s property, finances, or medical care.

FedWeek’s recent article entitled “Putting an Incapacity Plan in Place” suggests that, rather than a “regular” power of attorney, you may prefer one of the following:

A durable power of attorney can name a trusted friend, relative, or advisor to sign papers, if you are unable to make knowledgeable decisions.

These documents remain in effect if you become incapacitated.

Springing power is a durable power of attorney that will go into effect only if there is incapacity. One or more doctors must declare that you are incompetent or that you cannot perform some “activities of daily living,” such as being able to get dressed and go to the bathroom.

A springing power will not go into effect as long as you are competent.

Some financial institutions also may not accept your power of attorney because they require the use of their own forms.

Send a copy of your power to each of your banks, brokers and other accounts to see if there is an issue. Some companies will also not recognize old powers.

Add an expiration date on the document and update it every year or two, so it expresses your current wishes.

A power of attorney can also end for a number of reasons, such as when the principal revokes the agreement or dies, when a court invalidates it, or when the agent can no longer carry out the responsibilities outlined.

In the case of a married couple, the authorization may be invalidated if the principal and the agent divorce.

Reference: FedWeek (Feb. 1, 2022) “Putting an Incapacity Plan in Place”

 

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What Do I Need to Know About Long-Term Care Insurance?

Long-term care insurance covers nursing homes, assisted living and home health care expenses, explains WCAX 3’s recent article entitled “What to consider before you invest in long-term care insurance.”

A long-term insurance policy helps cover the expense of that care when you have a chronic medical condition, a disability, or a disorder, such as Alzheimer’s disease.

Most policies will reimburse you for care given in a variety of places, such as:

“If you live a long life, the chances of needing long-term care are high, but long-term care insurance is not an option for everybody. You need to start thinking about it generally before you turn 65,” said Jesse Slome, the director of the American Association for Long Term Care Insurance.

You should consider any assets you want to pass onto your children and whether it is worth paying the premiums. Planning ahead is recommended. It is best to be prepared for what can happen. You cannot always predict what will happen.

There are also medical requirements for some plans, and you must be medically eligible. Therefore, if you have serious illnesses or the beginnings of dementia, you will not be able to obtain long-term insurance.

Experts also say that your income and savings, what you want to pass on to the next generation and what role your family will play in your care are all factors to consider when taking out a policy.

Long-term care insurance policies are complex, and they vary significantly.

It really requires you, the consumer, to do some comparison shopping or ideally work with a specialist who understands and can do the comparisons for you.

Selecting long-term care policy is a lifestyle and financial decision.

Talk to an experienced estate planning attorney, if you have questions.

Reference: WCAX 3 (April 11, 2022) “What to consider before you invest in long-term care insurance”

 

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POA – What Estate Planning Documents are Used to Plan for Incapacity?

The chief reason for a Power of Attorney ( POA ) is to appoint an agent who can make decisions about business and financial matters if you become incapacitated, according to an article “Estate planning in case of incapacity” from The Sentinel-Record. For most people, the POA becomes effective at a later date, when the person signs a written authorization to act under the document, or when the person is determined to be incapacitated. This often involves having the person’s treating physician sign a notarized statement declaring the person to be incapacitated. This type of POA is referred to as a “Springing POA,” since it springs from a future event.

The challenge with a springing POA is that it requires reaching a point in the person’s life where it is clinically clear they are incapacitated. If the person has not yet been diagnosed with Alzheimer’s disease or another form of dementia, but it is making poor decisions or not able to care for themselves, it becomes necessary to go through the process of documenting their incapacity and going through the state’s process to activate the POA.

For a more immediate POA, your estate planning attorney may recommend creating and signing a Durable Power of Attorney. This allows you to appoint someone to manage personal and business affairs immediately. For this reason, it is extremely important that the person you name be 100% trustworthy, since they will have instant legal access to all of your property.

A Power of Attorney can be customized to include broad powers or limited to a specific transaction, like selling your home.

This is not the only way to allow another person to take over your affairs in the event of incapacity.  However, it is easier than seeking guardianship or conservatorship. Another method is to place assets in a revocable trust, which allows you to maintain control of the assets while alive and of legal capacity. The trust includes a successor trustee, who takes over in the event you become incapacitated or die.

The successor trustee only has control of the assets owned by the trust, so if the purpose of the trust is planning for incapacity, many, if not all, of your assets will need to be retitled and put into the trust.

A properly created estate plan will often use both the Durable Power of Attorney and a Revocable Living Trust, when preparing for incapacity.

Sadly, many people fail to have these legal tools created. As a result, when they are incapacitated, the family must go to court to have a person appointed to manage their affairs. This is usually referred to as a “legal guardianship.” The proceeding to obtain a guardianship is lengthy and complicated. Once the guardianship is established, the guardian must file annual accountings with the court documenting how all of the funds are used. The guardian must also post a surety bond, designed to protect assets in case of improper use.

Guardianship and its costs and time-consuming tasks can all be avoided with a properly prepared estate plan, including planning for incapacity.

Reference: The Sentinel-Record (March 27, 2022) “Estate planning in case of incapacity”

 

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What Types of Rooms are in Assisted Living Communities?

“An assisted living community is housing for seniors that provides long-term senior care, including daily support around personal care services, like meals, medication management, bathing, dressing and transportation,” explained  Sue Johansen, executive vice president of the community network A Place for Mom, a senior referral service based in Seattle in an interview with WTOP News’ in an article entitled “Types of Rooms in Assisted Living Communities.”

These communities also offer a wide range of activities to help seniors live vibrant and enjoyable lives. If you (or a loved one) are looking to move into an assisted living community, there are a number of factors to consider in choosing the right one. One of these is deciding on the type of room you will move into. Let’s look at the most common types of rooms in assisted living:

Private apartments. In many assisted living facilities throughout the country “residents live in their own units, which may include a living quarter, private bathroom and sometimes a small cooking or food storage area,” says Dr. Susan D. Leonard, a geriatric medicine specialist at the UCLA Medical Center. These can have many different setups or layouts and can be furnished or unfurnished. Private apartments typically cater to “seniors who want and are able to live independently, but may require some assistance,” Johansen says. They may be studios or one-bedroom assisted living apartments. Two-bedroom assisted living apartments are also a common option.

Condos. Some communities now offer high-end options, which can be very comfortable and feel more like a luxury condominium than a bare-bones apartment. These let residents have a bit more privacy when it comes to receiving care, which can be delivered on a schedule the resident prefers by a consistent staff.

Private rooms. Some communities offer assisted living rooms rather than entire apartments. In these communities, seniors may have a private bedroom, which may or may not include a private bathroom. “The option of a private room caters to the senior for whom privacy is important,” Johansen says. Any other living spaces, like a sitting room or kitchen, would be shared with other residents.

Shared rooms. This has two or more seniors in a single bedroom in a dorm-style setting. This option is the most affordable living space. A shared room “can also provide more of a social aspect or even a companion to the senior,” notes Johansen.

Memory care rooms. These are designed to support seniors who have dementia and may contain certain kinds of equipment.

Johansen remarked that the style and quality of the options available “can depend significantly on the community. It’s important for a senior who is making the transition from living on his or her own to living in an assisted living community to make sure to find the optimal living option that meets his or her needs.”

Reference: WTOP News (April 3, 2022) “Types of Rooms in Assisted Living Communities”

 

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New Bill Could Make Long-Term Care Insurance More Affordable

A new bill aimed at making long-term care insurance more affordable has the backing of Argentum and the American Seniors Housing Association.

McKnight’s Senior Living’s recent article entitled “Bill would reform tax code to make long-term care insurance more affordable, accessible” reports that the Long Term Care Affordability Act was introduced last week by Rep. Ann Wagner (R-MO), chair of the House Suburban Caucus. The bill is the House companion to tax code legislation introduced in the Senate by Sen. Pat Toomey (R-PA).

“Retirement can be expensive enough for seniors, and we should be using every tool we have to make their lives easier and more affordable,” Wagner said. “This legislation would do just that by providing for favorable treatment of long-term care through retirement accounts, allowing greater access to the necessary care they deserve.”

The new legislation would allow seniors to withdraw funds from their 401(k) accounts, 403(b) accounts and individual retirement accounts to pay for long-term care insurance.

The bill provides that up to $2,500 of a withdrawal used to pay for long-term care insurance would be excluded from income tax annually. These withdrawals would also be excluded from the 10% early withdrawal penalty tax.

“Argentum is proud to support the Long-Term Care Affordability Act, legislation to help more Americans better financially prepare for their long-term care needs,” Argentum President & CEO James Balda told McKnight’s Senior Living.

About 10,000 people now are turning age 65 every day in the U.S.. Estimates are that up to 70% will need some form of care in their lifetimes, he added.

According to Wagner, individuals from across the income spectrum would be able to take advantage of the tax benefit.

“Unfortunately, far too few Americans have adequate savings for retirement, let alone for their health and personal care,” Balda said. “We applaud Sen. Toomey and Congresswoman Wagner for their leadership in helping more Americans better access the tools to meet their future care needs.”

There are a number of other groups supporting the legislation. They include the Alzheimer’s Association, the Alzheimer’s Impact Movement, America’s Health Insurance Plans, Edward Jones, Long-Term Care Insurance Partners, the National Association of Insurance and Financial Advisors, the National Association of Insurance Commissioners and the National Association of Health Underwriters.

Reference: McKnight’s Senior Living (March 22, 2022) “Bill would reform tax code to make long-term care insurance more affordable, accessible”

 

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What’s Elder Law and Do I Need It?

Yahoo News  says in its recent article entitled “What Is Elder Law?” that the growing number of elderly in the U.S. has created a need for lawyers trained to serve clients with the distinct needs of seniors.

The National Elder Law Foundation defines elder law as “the legal practice of counseling and representing older persons and persons with special needs, their representatives about the legal aspects of health and long-term care planning, public benefits, surrogate decision-making, legal capacity, the conservation, disposition and administration of estates and the implementation of their decisions concerning such matters, giving due consideration to the applicable tax consequences of the action, or the need for more sophisticated tax expertise.”

The goal of elder law is to ensure that the elderly client’s wishes are honored. It also seeks to protect an elderly client from abuse, neglect and any illegal or unethical violation of their plans and preferences.

Baby boomers, the largest generation in history, have entered retirement age in recent years.  Roughly 17% of the country is now over the age of 65. The Census estimates that about one out of every five Americans will be elderly by 2040.

Today’s asset management concerns are much sophisticated and consequential than those of the past. Medical care has not only managed to extend life and physical ability but has itself also grown more sophisticated. Let’s look at some of the most common elder law topics:

Estate Planning. This is an area of law that governs how to manage your assets after death. The term “estate” refers to all of your assets and debts, once you have passed. When a person dies, their estate is everything they own and owe. The estate’s debts are then paid from its assets and anything remaining is distributed among your heirs.

Another part of estate planning in elder law concerns powers of attorney. This may arise as a voluntary form of conservatorship. This power can be limited, such as assigning your accountant the authority to file your taxes on your behalf. It can also be very broad, such as assigning a family member the authority to make medical decisions on your behalf while you are unconscious. A power of attorney can also allow a trusted agent to purchase and sell property, sign contracts and other tasks on your behalf.

Disability and Conservatorship. As you grow older, your body or mind may fail. It is a condition known as incapacitation and legally defined as when an individual is either physically unable to express their wishes (such as being unconscious) or mentally unable to understand the nature and quality of their actions. If this happens, you need someone to help you with activities of daily living. Declaring someone mentally unfit, or mentally incapacitated, is a complicated legal and medical issue. If a physician and the court agree that a person cannot take care of themselves, a third party is placed in charge of their affairs. This is known as a conservatorship or guardianship. In most cases, the conservator will have broad authority over the adult’s financial, medical and personal life.

Government programs. Everyone over 65 will, most likely, interact with Medicare. This program provides no- or low-cost healthcare. Social Security is the retirement benefits program. For seniors, understanding how these programs work is critical.

Healthcare. As we get older, health care is an increasingly important part of our financial and personal life. Elder law can entail helping a senior understand their rights and responsibilities when it comes to healthcare, such as long-term care planning and transitioning to a long-term care facility.

Reference: Yahoo News (Jan. 26, 2020) “What Is Elder Law?”

 

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How Do I Hire a Caregiver from an Agency?

Part One of AARP’s recent article entitled “How to Hire a Caregiver” explains that when you have a list of promising agencies, you should schedule a consultation.

It doesn’t matter if your family member is eligible for Medicare, Medicare’s Home Health Compare can be a terrific tool for finding and researching home health agencies in your area.

It provides detailed information on what services they provide and how patients rate them.

Working with an agency has its pros and cons. The pluses include the following:

  • Background checks. Caregivers must pass a background check.
  • Experienced caregivers. Agencies are likely to have a number of caregivers who cared for other seniors with the illness or condition affecting your loved one.
  • Backup care. If the primary aide is sick or doesn’t work out, an agency typically can quickly find a replacement.
  • Liability protection in the event that a caregiver is injured while at the home.
  • No paperwork. The agency takes a fee, pays the aide and does the payroll and taxes.

Here are some of the corresponding minuses of working with an agency:

  • Greater expense. You’ll pay more for an agency-provided caregiver.
  • Little choice. The agency chooses the worker, and he or she may not fit well with you or your family member.
  • Negotiation is limited, and individuals are generally more flexible about duties, hours and overtime than agencies.
  • There are agencies that don’t permit a part-time schedule.

In addition, you can contact an experienced elder law attorney and ask for recommendations.

Reference: AARP (Sep. 27, 2021) “How to Hire a Caregiver”

 

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When Should I Consult with an Elder Law Attorney ?

Elder law attorneys assist seniors or their family caregivers with legal issues and planning that related to the aging process. These attorneys frequently help with tax planning, disability planning, probate and administration of an estate, nursing home placement and many other legal issues.

Forbes’ recent article entitled “Hiring an Elder Law Attorney,” explains that elder law attorneys are specialists who work with seniors or caregivers of aging family members on legal matters that older adults face as they age. Many specialize in Medicaid planning to help protect a person’s financial assets, when they have Alzheimer’s disease or another debilitating illness that may require long-term care. They can also usually draft estate documents, including a durable power of attorney for health and medical needs, and even a trust for an adult child with special needs.

As you get older, there are legal issues you, your spouse or your family caregivers face. These issues can also change. For instance, you should have powers of attorney for financial and health needs, in case you or your spouse become incapacitated. You might also need an elder law attorney to help transfer assets, if you or your spouse move into a nursing home to avoid spending your life savings on long-term care.

Elder law attorneys can help with a long list of legal matters seniors frequently face, including the following:

  • Preservation and transfer of assets
  • Accessing health care in a nursing home or other managed care environment and long-term care placements
  • Estate and disability planning
  • Medicare, Social Security and disability claims and appeals
  • Supplemental insurance and long-term health insurance claims and appeals
  • Elder abuse and fraud recovery
  • Conservatorships and guardianships
  • Housing discrimination and home equity conversions
  • Health and mental health law.

Reference: Forbes (Oct. 4, 2021) “Hiring an Elder Law Attorney”

 

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