Long-Term Care; Be Prepared in an Area of Uncertain Options

Elder Law, Health Care, Retirement PlanningNo Comments

It’s flu season again, and the strain going around this year has been a difficult one, mainly because of how long it keeps its victims out of commission. So the article we recently found on Time.com about Long-Term Care seems particularly timely and relevant, if only because this year’s flu could be seen as an omen of what’s to come as Baby Boomers age into their golden years.

According to the article, “A huge wave of baby boomers may need long-term care in their golden years — and yet fewer than half have taken steps to prepare for it… two-thirds of Americans believe it’s important to plan for long-term care, but only 44% have taken steps to protect themselves.” Part of the reason for this lack of preparedness is that Baby Boomers underestimate the likelihood that they’ll need long-term care, or they overestimate the likelihood that their children or families will be able (or willing) to provide that care.

But there’s another reason why Baby Boomers are statistically unprepared for the crisis of old age; to put it simply, there aren’t any clear avenues to solid and reliable financial preparedness. “While it’s clear that not enough people are thinking about preparing for their long-term-care needs, it’s not at all clear what, if any, the best solutions are.”

Some think that extra savings in the bank will cover the cost of long-term care; others believe that government programs such as Medicaid or Medicare will take care of them. Unfortunately, both of these beliefs are mistaken. “The average cost of a nursing home ranges from $85,000 to $120,000 a year, while hiring an aide to spend six hours a day on average in the home starts around $40,000 a year… Medicare, meanwhile, only covers up to 100 days of long-term care and often involves co-payments. Medicaid will cover long-term nursing-home care but only after the person has drained his or her savings account.”

The only other obvious solution is long-term care insurance; but even with long-term care insurance, nothing is clear cut, and too many people have found themselves paying into a policy and ending up with no return on their investment. This isn’t to say that long-term care insurance shouldn’t be an option, only that it’s one to be well-researched. Long-term care insurance is still one of the best options out there, but “There have been horror stories of people paying premiums on long-term-care insurance policies for years, only to find the benefits won’t cover their needs 20 or 30 years down the road when health care and long-term-care costs are significantly higher.”

The best advice we can give is to do your research and ask for the help of an advisor with experience in elder law, elder care, and senior financial planning. Whatever you do, don’t throw the baby out with the bathwater—we may have no clear and easy answers yet, but that’s no excuse to remain completely unprepared.

Knowledge and Communication is Key to Avoiding Family Fights

Elder Law, Estate PlanningNo Comments

Do your adult children know which of them will be your power of attorney if something happens to you? Most people don’t want to think about Alzheimer’s, dementia, or getting old; and those who have thought about it often choose to keep their wishes secret, their documents held under lock and key until the time comes when they are needed. But according to a recent article in Reuters, one of the most critical steps a parent can take toward preventing sibling fights is to state early and openly which adult child is their choice for power of attorney.

“In order to avoid conflict, parents [should] sit down with their children and spell out who has been appointed and why… It’s something that really has to be thought out in advance, hopefully before a crisis has arisen and while the parent is still able to express their goals.”

Open communication can go a long way toward smoothing relationships between family members, but if that by itself isn’t enough to keep the fights to a minimum, the advice of a trusted advisor can often dispel suspicions that may be brewing just beneath the surface. But don’t wait until arguments have already exploded, the best course of action is to consult with your advisor before intervention is necessary. Asking your advisor to sit down with yourself and your family members gives each child a chance to ask questions and voice their concerns; it also gives them a chance to hear from your own lips what you’re planning and why you’re planning it.

Making Plans for Aging at Home

Elder LawNo Comments

There used to be very few options for seniors who began to have trouble living on their own. In many cases the only options available were to move in with family or move into a nursing home. Now, however, that doesn’t have to be the case. With new advancements in technology, the help of family and local aging services, and with some planning and forethought, many seniors will be able to live at home and on their own for many years. Here are a few things to consider right now if you want to age at home in the future:

Support System- Do you have family or friends nearby who can check on you regularly and help when home maintenance issues crop up? Having someone close to you who can provide you with transportation is helpful as well, although many cities have public transportation services that may be an option.

Home Renovations- Is your home senior or handicap friendly? Are doorways and hallways wide enough to accommodate a wheelchair? Could you easily add ramps or lifts in place of stairs, if necessary? Do your kitchen and bathrooms facilitate easy maneuverability with as little reaching or bending over as possible?

Security or Medical Alert System- Having a security or medical alert system in place can provide immeasurable comfort to an elderly homeowner and his or her family. The technology for this is improving by leaps and bounds, and there are a number of different options available.

In-Home Care Services- The length of time you can remain in your home can be greatly increased if you have the financial means for (and access to) quality in-home care services. Someone to do basic cleaning and cooking, and help with daily activities, can prolong your time spent at home… but you have to plan for it.

Getting older shouldn’t mean you have to give up your home, your friends and neighbors, or your independence. For more information about what you may need to stay in your home as you age check out the website for the National Aging In Place Council.

Adult Children and Elderly Parents: Caring for Each Other

Elder Law33 Comments

The idea of adult children caring for aging parents or grandparents is not a new one. In fact, with the aging Baby-Boomer population, adult children giving up free time or extra hours at work to care for relatives is a growing trend. But recently families have begun creating “caregiver compensation agreements,” something which can end up benefiting both parties in a number of ways.

According to a recent article in the Wall Street Journal, “the high unemployment rate, the rising cost of nursing-home care, an aging population, and a 2006 change in Medicaid law that makes it harder for people who wish to qualify to give away assets” are all contributing factors to the growing trend of these compensation agreements among family members.

How can it help you?

If you’re a caregiver the benefits of a caregiver compensation agreement are fairly self explanatory. “Some 37% of caregivers surveyed by the NAC in 2007 said they had quit a job or reduced their hours to accommodate their responsibilities,” some kind of compensation seems only fair. And if you feel uncomfortable taking “wages” from your parents, there are other ways to arrange for compensation. “Attorneys say many families pay an hourly wage. As an estate-planning tactic, others opt for annual gifts or a lump-sum payment designed to cover services over an extended period. Some arrange for the caregiver to receive a larger inheritance.” It will all depend on what works best for your family.

If you’re the one receiving the care, compensation agreements can benefit you as well. Paying a family caregiver can help you deplete your savings and qualify for Medicaid, it can also help you reduce your taxable estate, as well as give a gift of sorts to younger family members who may be in need. Remember that Medicaid rules vary from state to state, so enlist the help of your attorney before signing any contracts.

However you may decide to structure your compensation agreement, disclosure can be of the utmost importance. Make other family members aware of the agreement up front to avoid suspicion or hurt feelings later on.

Talking to Siblings About Caring for Mom and Dad

Elder Law1 Comment

Many modern families have members living all over the country—and all over the world. Which means that the holiday season provides one of the only times to all get together in person, celebrate, catch up… and talk about caregiving strategies for aging parents. Unfortunately, this kind of conversation can be a difficult one, especially if not all siblings agree about mom or dad’s needs, or if one sibling feels that he or she shoulders an unfair amount of responsibility. In spite of the difficulty, having the conversation can be of the utmost importance.

In this article in Time Magazine author Francine Russo describes the consequences that can follow when lines of communication break down. “It wasn’t until my mom’s funeral, watching my dad and sister cling to each other and weep, that I got a hint of their long ordeal — and how badly I’d screwed up.”

Russo makes the point in her article that much of the tension and disagreement among siblings can come from inaccurate or conflicting information. “Friction often stems from parents giving their children different information about how they’re doing. Mom may put on a good show for the out-of-towner, who then discounts what the local sibling says.” This is all the more reason for siblings to communicate with each other, not just through mom or dad.

If you aren’t sure how to get the conversation started, Paula Spencer, senior editor for Caring.com wrote this article for Third Age which gives some helpful strategies on how to ease into the difficult topic of caring for aging parents this holiday season.

Estate Planning Through the Ages

Elder Law, Estate Planning30 Comments

Can you remember what you were doing in your early 20s? Can you imagine what kind of life you’ll be living in your 70s or 80s? We experience incredible changes as the decades roll by—not just to ourselves, but in the world at large. With our lives changing so much, our estate planning documents and strategies should hardly remain static. Here is a guide to how your estate plan may or may not evolve through the decades.

In Your 20s: You’re young, just finishing school and starting in your career, unlikely to be married yet… the last thing you’re thinking about is estate planning! At this time of life, who gets your “stuff” may not be as important as who will make your decisions. Choosing your financial and healthcare agents and creating your power of attorney and healthcare directive are the important things to do at this time.

In Your 30s: Marriage, children, home ownership—most of these things happen in your 30s, and your estate plan should reflect that. Now is the time to choose guardians for your young children, decide with your spouse how your joint property will be distributed, and get serious about life insurance.

In Your 40s: This is when your strategy may switch from simple direction of inheritance to more serious asset protection. You’ve worked hard and saved, and you’ll want to think about the best way to maximize your assets with trusts and tax planning.

In Your 50s: As your children start to become independent you may have more freedom with your income. Some people choose to create charitable trusts, some prefer to invest for retirement, and still others decide it’s time to take a risk and start over with a second career. Your estate planner can advise and help with all of these.

In Your 60s: Ah retirement! Making the big change from work to retirement means making changes to your estate plan as well. If you’ve been keeping up with your planning through the decades all that is required now will be some basic maintenance; changes to account for marriages of your children, the birth of grandchildren, and your own relocation to someplace warm and sunny. But beyond the basic maintenance, you may want to start doing some simple Medicaid and long-term care planning—just in case.

In your 70s and Beyond: Health is the key word now. Our life-spans are getting longer, but so are our illnesses, you need to be ready. Tighten up your estate plan, invest in long-term care insurance, and although it may sound morbid, talk to your doctors and family about your end-of-life decisions.

The life alterations that come over a span of decades are difficult enough; you don’t want to have to find a new lawyer every time your circumstances change. Our firm makes it our business to keep up with you at every stage.

Facing the Future with Long Term Care

Elder Law, Health CareNo Comments

November 2010 is Long Term Care Awareness Month, which means it’s the perfect time to talk about your thoughts, concerns, and plans for your own long term care. According to this article by Ken Dychtwald, PhD, “average life expectancy is now at 78 and rising. And, if you’re already 55 or more, life expectancy has soared to around 84.” Furthermore, “Two-thirds of people over age 65 will need some kind of long term care.” This means that it can never be too early to start planning for your future.

Dychtwald points out in his article that “Uninsured medical expenses are the top financial worry among men and women age 55 and over. People… worry most about these expenses’ unpredictability and potential for high costs.” People know that their health is likely to decline slowly as they age, and people know that they will need care—possibly a lot of it—that the cost of this care is rising steadily, and that they will need a way to pay for it. In spite of this, “many Americans are confused about what long term care actually is, and they’re surprised to learn that Medicare and/or traditional health insurance do not cover most long term care needs.”

Life expectancy is rising, and the nature of “old age” is changing quickly. We live longer, but we don’t necessarily live better; and what we’re headed for is an entire generation of people who are unprepared for the rigors and expense of “the new” old-age. Luckily, this doesn’t have to be the case.

The article above suggests that “There are three core topics in family conversations about long term care: (1) what care options are most preferred (e.g. if you needed some help, would you prefer to be cared for at home, in an assisted living facility or in a nursing home?); (2) potential roles and responsibilities of different family members’ (and possibly, help from a professional care coordinator, aid or nurse), should it ever be necessary to manage care; and (3) how to pay for any required long term care (with your or a family members’ savings, through Medicaid or with a long term care insurance policy?).”

We urge our readers to talk about these issues with their loved ones. The conversations may be uncomfortable at first; but fear of the future—lack of preparation for the future—is far worse. Discuss long term care with your loved ones and your trusted advisors. Be ready for whatever the future may bring.

The Quiet Devastation of Alzheimer’s Disease

Elder Law, Estate Planning, Health CareNo Comments

According to a recent report put out by the Alzheimer’s Association, 5.3 million people have Alzheimer’s disease. Chances are that you or someone you know has been touched by this illness. In spite of these overwhelming statistics, Alzheimer’s continues to be a disease that sneaks up on individuals and their families, quietly tearing apart lives with uncertainty and confusion. Estate planners and elder law attorneys sometimes see this heartbreaking confusion in our own offices when elderly clients or their families come to us, concerned that a loved one no longer has the capacity to sign or make decisions about legal documents.

A new article in the New York Times discusses the slow and sometimes invisible development of Alzheimer’s disease, and some of the earliest warning signs that your loved one may be suffering. “New research shows that one of the first signs of impending dementia is an inability to understand money and credit, contracts and agreements.” This comes as particularly bad news to families who put off their estate planning year after year, each time telling themselves “We’ll do this next year for certain.”

By the time families come into our office with their suspicions about their aging loved one it may be too late for us to help. “Lawyers have guidelines, published in 2005, that include warning signs of diminished capacity, like memory loss and problems communicating and doing calculations. The guidelines instruct lawyers to look at the legal requirements for capacity in specific situations, like making a gift. But many questions remain.”

Plans created after the suspicion of Alzheimer’s or dementia has set in can be fraught with doubt, and often cause conflict among family members. We have seen the rifts and heartbreak the illness causes in even the strongest of families. We urge you to take care of important legal and estate planning issues early, before questions of competence can cast the shadow of doubt over your wishes.

Just Say No? Medical Marijuana in Nursing Homes

Current Events, Elder LawNo Comments

The legalization of marijuana is on the ballot in California this November, but California isn’t the only part of the country where marijuana is making news. The use of marijuana for medical purposes is being debated around the nation—especially as concerns elderly patients in nursing homes which receive federal funding through Medicare or Medicaid.

This article on the New York Times’ New Old Age Blog reports on this issue, and just how concerned and confused nursing home facility administrators are about what their options are and how to proceed. “Any patient using medical marijuana breaks federal law. Marijuana is listed as a Schedule 1 drug, which means the federal government considers it to have no medicinal value. Despite this, physicians in 14 states and the District of Columbia are allowed to recommend it. . . Many facility administrators wonder how they can comply with federal law and preserve their reimbursements and at the same time permit residents to medicate with marijuana.”

Federal funding isn’t the only conflict attached to the medical marijuana issue. Nursing homes in New Mexico (a state where marijuana was legalized for medicinal purposes in 2007) report that “the lack of dosing direction has caused problems. . . Pills in nursing homes are in what they call vacuum packs: you have to pop a pill out one at a time. They don’t do that with marijuana. It’s an amount of marijuana in a small plastic bag, so there is no way to track if someone took one or two pinches.”

Another issue to consider is the stigma attached to marijuana use, and complaints from other patients or residents.

Medical marijuana is generally prescribed to seniors to help them deal with chronic pain. Oregon’s long-term care ombudsman, Mary Jaeger, asks in the article above “Wouldn’t any one of us, in our own homes, feel that we have the right to live our lives by our own values and choices, to preserve our own dignity and, frankly, to live pain-free?” Will seniors moving to federally supported nursing homes have to find other ways to deal with chronic pain? And more importantly… will they be willing to do so?

Plan Ahead to Avoid Financial Pitfalls in 2011

Current Events, Elder LawNo Comments

A recent article in U.S. News and World Report points out that although “the Great Recession may technically be over… Consumers [still] don’t want to spend and are still slowly digging their way out of the mountain of mortgage and personal debt that helped fuel the downturn.” Among those groups who are still struggling the most are seniors and retirees, many of whom took a devastating hit to their retirement investments and savings, and are still struggling to recover.

Unfortunately, according to the article, 2011 may bring with it some new financial concerns for seniors. Some of the “major money issues” seniors will have to think about in the coming year include a zero cost of living adjustment from the Social Security Administration, changes to certain Medicare policies, a rise in income and capital gains tax rates, and the return of the estate tax, among others.

Although the article itself offers no particular solutions to these financial concerns—it merely gives a warning of what’s to come—there are steps you can take to avoid some of the worst financial pitfalls. Because each individual situation will be different there is a danger to blindly following (or offering) standard advice across the board. However, with consultation and careful planning there are a number of strategies estate planners can recommend that may help your family protect your assets now, and when the estate tax returns. Forewarned is forearmed, and taking the time to consult with your estate or financial advisor and plan ahead may be the best action you can take.

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