Why Long-Term Care Insurance ?

About 70% of people over 65 will need some sort of long-term care. It may be temporary, but it can be expensive.  It is also important to remember that is not a reimbursable expense under Medicare, unless the stay is under 100 days, says Nola.com’s recent article entitled “Facing up to the financial realities of elder care.”

A year in an assisted living facility during that same period is about $55,000 a year, on average, nationwide. Hiring an hourly home health aide (based on a 44-hour workweek) costs $60,000 a year.

While there is the option of long-term care insurance, it must be purchased when you’re still young to make the premiums affordable. Denials are also frequent for those with pre-existing conditions, like diabetes, heart disease, or obesity. Dementia is an automatic rejection by insurers. A major variable in the price is the amount you want the policy to cover, and for what duration. The average price for premiums if you’re 55 years old is about $2,200 a year for $200 in benefits a day (although a private room in a nursing home costs around $300 a day). Women, traditionally, are more expensive to insure because they live longer. If you delay until you’re 70 to buy long-term care insurance, a man’s premiums are about $5,000 a year, while a woman’s is over $7,000.

There are alternatives to buying long-term care insurance. However, it means investing retirement money early enough to cover the rising cost of being a resident in an out-of-home facility.

In many states, Medicaid will cover nursing care only after you’ve depleted any savings down to $2,000 or so. That would mean depleting all of your retirement savings before becoming eligible. However, before you think you can just give your money away after a diagnosis, the state has a look-back period. That means the state can “look back” over a certain time before applying (usually five years) to determine whether monies were given away at less than fair market value. This will deny your Medicaid application.

At the current rate of inflation and with continually rising healthcare costs, by 2050, a private room at a nursing facility for a year will cost well over $300,000. That’s a figure that will break most people’s banks.

Reference: Nola.com (Oct. 14, 2022) “Facing up to the financial realities of elder care”

 

Comments Off on Why Long-Term Care Insurance ?

Can an Elder Law Attorney Help Me with Medicaid?

Paying for a nursing home – Ensuring that the elderly have their rights respected is extremely important. That is where an elder law Medicaid attorney can play a major role.

MarketWatch’s recent article entitled, “What does an elder law Medicaid attorney do?” explains that an elder law attorney specializes in the needs of older adults, which can be different when compared to younger adults, such as Medicaid.

The financial rules for Medicaid coverage are complicated and state-specific. However, generally people must spend down to about $2,000 in savings and investments.

Planning to use Medicaid for paying for nursing home is also complicated by the fact that, while its coverage of nursing home care is comprehensive, its payment for home care and assisted living facility fees is only partial and differs both from state to state.

An elder law Medicaid attorney knows and understands the Medicaid requirements.  Medicaid qualification generally comes with a very specific set of requirements. The elder law Medicaid attorney can help you with this application process for paying for nursing home.

Medicaid is only available after a person has depleted almost all their assets. An elder law attorney can use techniques to lower an applicant’s countable income or assets. That will help make the applicant eligible, while protecting their life savings and home at the same time.

In addition, an elder law Medicaid attorney can help with some pre-planning for emergency situations if you need to be paying for nursing home.  This may include estate planning. In particular, a durable power of attorney for health care is a legal document that lets your designated agent or proxy make medical decisions for you, if incapacitated.

Another document is a living will, which is designed to apply only in very limited situations when you have an incurable or irreversible medical condition or conditions that will most likely will result in your death within a short period of time.

A living will can address life-sustaining treatments, such as ventilators, nutrition via a feeding tube and cardio-pulmonary resuscitation (CPR) or other extraordinary measures. It can also address issues like pain management and palliative care.

Reference: MarketWatch (Oct. 4, 2022) “What does an elder law Medicaid attorney do?”

 

Comments Off on Can an Elder Law Attorney Help Me with Medicaid?

Estate Plans Can Protect against Elder Financial Abuse

Elder Financial Abuse is far more common than most people think, especially of the elderly. There are several types of individuals more at risk for exploitation, according to a recent article from mondaq titled “How An Estate Plan Can Protect Against Financial Exploitation.” These include someone with a cognitive impairment, in poor physical health, who is isolated or has a learning disability.

Exploiters share common characteristics as well. They are often people with mental health illness, substance abusers or those who are financially dependent on the person they are exploiting.

There are warning signs of financial abuse, including:

  • Changes in patterns of spending, transfers, or withdrawals from accounts
  • Isolation from friends and family
  • Unexplainable financial activity
  • An inability to pay for routine bills and expenses
  • Sudden changes to estate planning documents, beneficiary designations, or the addition of joint owners to accounts or property titles

One way to avoid Elder Financial Abuse is with an estate plan prepared in advance with an eye to protection. Instead of relying on a durable power of attorney, a funded revocable trust may provide more robust protection. A revocable trust-based plan includes safeguards like co-trustees and a requirement for independent party consent to any trustee change or amendment.

A support system is also important to protect a person if someone is attempting to exploit them. Estate planning attorneys team up with financial advisors, CPAs and other professionals to create a plan to avoid or end elder abuse. Other steps to be taken include:

  • Consolidating accounts with a trusted financial advisor, so all assets are easily observed
  • Have a family member or trusted person receive copies of account statements
  • Consider a credit freeze to avoid any possibility of being coerced into opening new credit card accounts or taking out loans.
  • Establishing a budget and sharing information with advisors and a trusted person, so any spending anomalies are easy flagged.

Elder financial abuse is an all-too common occurrence but taking proactive steps to safeguard the vulnerable family member is a good strategy to deter or thwart anyone intent on taking advantage of a loved one.

Reference: mondaq (Sep. 23, 2022) “How An Estate Plan Can Protect Against Financial Exploitation.”

 

Comments Off on Estate Plans Can Protect against Elder Financial Abuse

Do Hospice Patients Recover?

There are several dimensions to hospice care, and a recent article in Seasons titled “How common is it for hospice patients to recover?” discusses each of them. The article notes that it’s highly unusual for hospice patients to “recover.” The diseases that prompt people to come into hospice initially are conditions that, by definition, aren’t curable.

However, it’s not uncommon for patients to experience stabilization of their condition. For example, a patient may have experienced a significant stroke from which his or her physician doesn’t think they can recover, so they are admitted to hospice. He or she may begin to experience some stabilization, despite the fact they remain significantly compromised—and they no longer qualify for services.

Some patients are admitted to the hospice with critical diseases – fractures, trauma, infections, sepsis, etc. – from which they are likely to die. However, ultimately, frequently and inexplicably, they don’t.

Similarly, patients with chronic, progressive diseases, such as Alzheimer’s, congestive heart failure, or chronic lung disease, may have a trajectory that suggests they won’t survive more than a few months, making them eligible for services. However, with the provision of hospice services and control of problematic symptoms, their trajectory may change—no longer anticipating a short course.

Regulators know that conditions may change, and patients once eligible for hospice may no longer have a terminal condition that might qualify them for hospice. They are sometimes called “hospice graduates.”

Most facilities see about 5-15% of their admitted patients who ultimately “graduate” and are discharged from hospice services.

In addition, there’s a rare but identified condition referred to as “vanishing cancer syndrome.” This is a circumstance in which a cancer is definitively diagnosed, with no treatments offered, or progression despite treatment. The patient is admitted to hospice, but several months later, the patient hasn’t passed away and seems to be improving.

Further studies demonstrate the cancer is no longer there. Theories ranging from a “super immune” response to a miracle have been proposed, but an explanation for the phenomenon remains elusive.

Aftercare is individualized and would typically include some aspects of home health services and/or private duty resources, as well as ongoing management by the patient’s primary medical team.

Reference: Seasons (Aug. 17, 2022) “How common is it for hospice patients to recover?”

 

Comments Off on Do Hospice Patients Recover?

There are Less Restrictive Alternatives than Guardianship

The benefit of restrictive alternatives to guardianships is that they don’t require court approval or judicial oversight. They are also much easier to set up and end.

The standard for establishing incapacity is also less rigorous than the standard required for a guardianship, says Kiplinger’s recent article entitled “Guardianships Should Be a Last Resort – Consider These Less Draconian Options First.”

Limited guardianships. A guardianship takes away an individual’s right to make decisions, just as full guardianships do, but they are specific to only some aspects of the person’s life. A limited guardianship can be established to manage an individual’s finances and estate or to control medical and health care decisions. These types of guardianships still require court approval and must be supported by a showing of incapacity.

Powers of attorney. Powers of attorney can be established for medical or for financial decisions. A second set of eyes ensures that financial decisions are well-considered and not harmful to the individual or his or her estate. A medical power of attorney can allow an agent to get an injunction to protect the health and well-being of the subject, including by seeking a determination of mental incapacity. A durable power of attorney for health care matters gives the agent the right to make medical decisions on behalf of the subject if or when they are unable to do so for themselves. Unlike a guardianship, powers of attorney can be canceled when they are no longer needed.

Assisted decision-making. This agreement establishes a surrogate decision-maker who has visibility to financial transactions. The bank is informed of the arrangement and alerts the surrogate when it identifies an unusual or suspicious transaction. While this arrangement doesn’t completely replace the primary account holder’s authority, it creates a safety mechanism to prevent exploitation or fraud. The bank is on notice that a second approval is required before an uncommon transaction can be completed.

Wills and trusts. These estate planning documents let people map out what will happen in the event they become incapacitated or otherwise incapable of managing their affairs. Trusts can avoid guardianship by appointing a friend or relative to manage money and other assets. A contingent trust will let the executor manage assets if necessary. For seniors, it may be wise to name a co-trustee who can oversee matters and step in should the trustor lose the capacity to make good decisions.

Reference: Kiplinger (July 7, 2022) “Guardianships Should Be a Last Resort – Consider These Less Draconian Options First”

 

Comments Off on There are Less Restrictive Alternatives than Guardianship

Understanding the Issues of Elder Law

Elder Law – The legal needs of many older Americans go beyond basic legal services. They are also all intertwined. In addition to understanding the legal issues and complications that older Americans face, elder law attorneys must also understand the surrounding personal concerns of their clients, such as health, financial and family issues, and how those affect their clients’ legal issues.

Recently Heard’s article entitled “What You Need to Know About Elder Law” explains that other specific areas of expertise include the following:

  • End of life planning could extend to planning your health care support system as you age, signing a power of attorney, establishing a living will and other issues surrounding end of life care.
  • Financial issues frequently entails questions about retirement and financial planning, housing financing, income and estate tax planning and gift tax issues.
  • Long term care can include planning for asset protection, insurance for in-home care or assistance with activities of daily living, Medicare planning, insurance, veterans’ benefits and other issues.
  • Residents’ rights issues may include claims or complaints you bring while a patient in a nursing home or long term care facility.
  • Workplace discrimination issues stem, from the fact that older Americans sometimes face age and disability discrimination in the workplace.
  • Guardianship issues might include guardianship avoidance, planning wills and trusts, planning for the future of a special needs child, probate court and other issues surrounding minor or adult children.
  • Landlord-tenant law may mean handling disputes with landlords, contesting an eviction, dealing with foreclosure issues, rent increases and more.
  • Abuse, neglect, and fraud. These elder law attorneys specialize in cases where an older client is being victimized.

An elder law attorney can be a great partner for you as you plan out the legal and financial aspects of the next stage of your life-or the life of a loved one. Speak to one today.

Reference: Recently Heard (June 23, 2022) “What You Need to Know About Elder Law”

 

Comments Off on Understanding the Issues of Elder Law

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?”

 

Comments Off on What are Benefits of Pre-Planning My Funeral?

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”

 

Comments Off on Is Your Incapacity Plan in Place?

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”

 

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

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”

 

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