Stuck In The Middle: Caring For Aging Relatives

“Too rich for most government-funded social programs and not rich enough to pay for full-time, long-term care services.”

Does this sound familiar?  It is exactly the kind of financial situation most elderly find themselves in today, and one which requires many adult children who are still raising their own kids to also care for their parents.  That is the situation in which Michelle Singletary, Washington Post staff writer, finds herself in today.  In her W.P. article Prepare now for a future that might include caring for your elderly family, she describes the feelings of frustration, admiration, and obligation that come with caring for her elderly father-in-law.

Singletary writes movingly about the realities of caring for an aging relative, but what she seems most determined to convey is that it is never too early to start thinking about what your own parents’ future holds. “If you have even an inkling that you may become the caregiver for an aging parent or relative, start planning for it now. Ask questions about the person’s finances. Collect information from community and nonprofit organizations. Get your own finances in order because you’ll probably have to pitch in financially.”

Part of planning for your aging parent or relative is thinking about Medicaid, Long-Term Care Insurance, and the best way to save and protect your assets.  Call our firm and let us help you—and help your aging parents.

Will You Be Able To Afford Old Age?

Are you ready for the financial implications that come with growing older? As the average American lifespan grows longer the cost of aging becomes more and more prohibitive.

A recent segment on NBC’s The Today Show is takes a close look at long-term care and the price individuals and couples are required to pay as age related illnesses make it more and more difficult for senior citizens to live at home without care.

The show tells the story of “Roberta” and her husband, a couple married for 44 years, who felt there was no choice but to divorce after Roberta’s husband was diagnosed with dementia and the subsequent nursing home bills quickly depleted their assets.  After paying no less than $75,000 in care costs, Roberta was advised by her attorney that one of the only ways to conserve her remaining assets for her own support would be to divorce her husband, allowing him to qualify for Medicaid coverage.

With growing numbers of senior citizens being diagnosed with debilitating elderly illnesses, and the cost of nursing care on the rise, more and more couples are finding that without some kind of long term care insurance they simply can’t afford the cost of aging. Medicaid can help, but as the story of Roberta and her husband shows, Medicaid doesn’t come without its own price.

Plan ahead for your own old age by talking to your advisors about Medicaid and your options for long-term care insurance.

The IRS Provides One More Reason to Consider Long-Term Care Insurance

In the estate planning business we help people plan for the future, not only for their children and heirs but for themselves as well; which is why we are pleased to share the news that it just got a little bit easier to plan for your own financial future, because according to this article on Emax Health the IRS has just approved higher tax deductions for long-term care insurance.

Advancements in health care and our standard of living mean that Americans are living longer than ever before, but that doesn’t mean they’re living better in their old age. Very few of us get to be healthy and hearty until our dying days; rather, most aging Americans will experience a slow decline in their mental and physical health, and require some kind of nursing care, either at home or in a nursing facility. Unfortunately, the cost of that care is prohibitively expensive, and once a patient’s own financial resources have been exhausted the burden then falls on their family, or they end up relying on government benefits.

Long-term care insurance is one way of planning ahead to pay for the nursing care that most of us will almost assuredly need.  The higher tax deductions approved by the IRS offer one more reason to consider long-term care insurance: by planning for your future you can save on your taxes right now. But do your research and consult with a professional before you jump in, because the deductions are available only on “qualified” policies, and there are limits to how large a premium can be deducted depending on the age of the taxpayer at the end of the year.

Alzheimer’s Disease Can Take Your Memory AND Your Financial Security

Alzheimer’s disease affects as many as 5.3 million people in the United States; which means it affects as many as 5.3 million families, because Alzheimer’s is a disease that affects everybody it touches—husbands, wives, children and grandchildren—they all bear witness to their loved one’s slow demise.

Sadly, emotional stress is not the only stress that accompanies Alzheimer’s disease; those loved ones serving as caretakers may carry a huge amount of financial stress as well. According to this article by Denise Bonilla the cost of caring for an Alzheimer’s patient can run anywhere from $64 a day to $77,380 a year, and because Alzheimer’s disease can be such a long-lasting disease (a person can suffer from Alzheimer’s for up to 20 years) the costs of care can end up being astronomical.  It’s obvious that people can’t do it alone.

Some of the options to help Alzheimer’s patients pay for medical expenses are long-term care insurance or Medicaid (Medicare doesn’t cover the cost of long-term care). Long-term care insurance can be very helpful… if you’ve thought ahead and purchased the policy before you or your spouse began suffering from symptoms of Alzheimer’s. As for the government programs, those also can be helpful… if you fall in the right category and know how to navigate the complex system.

Unfortunately, learning how to navigate the system is not something you can do in an hour or two.  Because your experience will depend on a number of unique factors we can’t give you an easy set of instructions to follow. The best advice we can give is to say that right now, the best way to navigate the Medicaid/Medi-Cal system is to find someone who knows the system to assist you. Most estate planning and elder law attorneys help their clients with these issues on a regular basis.  If you want to ensure that you and your loved ones will be cared for no matter what the future may bring, don’t be afraid to ask your attorney for help.

Your Family Law Firm

We write a lot on our blog about the separate pieces of an estate plan, the unique financial challenges facing adults these days, or each of the many individual concerns we face in the course of keeping up with the present and planning for the future; but today we want to look at the big picture. We strongly feel that planning for the future—really taking care of your family and loved ones—is not about individual pieces, it’s about seeing how those pieces fit together and make up the whole. Which is why, whenever we can, our firm takes a comprehensive approach to protecting your family and your future:

Providing for young children: We know that one of the hardest things to do as a parent is to try to imagine your child’s life without you. We also know that getting over that hurdle and choosing the best guardians for your child and creating a trust designed for their unique needs can bring a world of comfort.

Providing for elderly parents: Baby boomers are not called “the sandwich generation” for nothing. Having an attorney who can help you with the guardianship of minor children and then turn around and help you understand the ins and outs of Medicare for the benefit of your aging parents is not only convenient, it’s essential.

Planning your own retirement: The process of creating an estate plan forces you to get all of your ducks in a row, including your retirement and investment accounts, and we can help. In addition, our firm can help you understand (and execute, if desired) a Retirement Trust, which not only extends your retirement fund past its initial payout date, but gives you more options for distributions.

Saving for college: We can help you make sure that your college-age children will have the wherewithal to follow their (and your) dreams for education in the event that anything happens to you. An education trust is the perfect way to provide for your children’s schooling.

Investing in the future: The future is the business of an estate planning attorney, whether it be protecting your life insurance policy for your family, saving your property from probate fees, or minimizing your taxes.

We know that it’s not easy finding someone you can trust with your family security and finances. Our compassion and expertise make us more than just an estate planning firm, a probate specialist, or an elder law firm—we’re your family law firm.

How to Prepare for Long Term Care

If you are the child of parents who are now over the age of 65 you’ve probably given at least some passing thought to the day when one of your parents may need Long Term Care.  Perhaps that still seems a long way off, or perhaps you see some of the warning signs already.  Either way, there are steps you can take now to make the transition to giving and receiving care later easier on both you and your parents.

First and foremost, talk about it with your parents.  It may seem like a difficult subject to broach, but it is necessary if you want to be able to work cooperatively in the future.  Find out if your parents have already thought about the topic, if they’ve made provisions for it, or if they have any specific wishes.

Second, encourage your parents to create an Estate Plan if they don’t have one already.  An Estate Plan will be important in expressing your parents’ wishes on necessary issues such as preferred agents in case of incapacity, financial power of attorney, and health care decisions.  These essential documents will prevent many expensive delays and frustrating red tape in the future.

Third, think about what steps you and your parents may need to take to prepare for the financial burden of Long Term Care, because there will be a financial burden.  Mellody Hobson of ABC News has some suggestions on how to plan, and what your financial options are.  She describes the more well-known options of Medicaid and Long Term Care Insurance, as well as some lesser known options such as a Dependent Care Account.

The most important thing to remember as you think and talk about these issues is that you don’t have to—and you shouldn’t—go through this alone.  Elder Law and Long Term Care are intricate and convoluted subjects, and you can serve your parents and your family best by getting the help of caring professionals whose business it is to guide you smoothly through the ins and outs of Elder Care.  This includes professionals such as doctors, geriatric care managers, financial advisors, and yes—estate planning attorneys.  Let us help you look into the future with confidence and clear eyes.

Geriatric Care Managers: A New Solution to an “Old” Dilemma

If you have an elderly parent or grandparent, you know how much time and research goes into finding the right care, the right doctor, or the right living situation for them.  Caring for the aging population is a growing industry, with new services and options almost every day. Trying to keep up with it can feel close to impossible.

Enter the new professional: Geriatric care managers.  This “new” profession is poised to play a significant role in the near future.  This article in the New York Times describes geriatric care managers as “guides through the fragmented care landscape, connecting clients with local services, assisted-living facilities and a wide network of paid caregivers, elder law attorneys and financial advisers. They help families find living options, assess the abilities of older people, write care plans and sometimes hire and supervise home help”.

In actuality, geriatric care managers have existed in the United States for about 20 years, but the profession is only now starting to boom.  And with a description like the one above, it’s easy to see why.

The aging process in the United States is evolving more quickly than most people thought possible.  And more and more baby-boomers, who have yet to reach the age where they need elder care, are planning for their own sunset years rather than leaving it in the hands of their children.  Geriatric care managers are likely to become an invaluable resource for the “sandwich generation” AND elderly individuals themselves.

If you are caring for an aging relative, or trying to plan for your own future, consider contacting a geriatric care manager in your area through The National Association of Professional Geriatric Care Managers.

Is your home fair game for Medicaid?

If you have heard me speak anytime in the past two years, you have heard me say that the greatest threat that you face to your life savings is the ever rising cost of nursing home care. Currently, the average cost of care in a nursing home is about $6000.00 per month. Of course you aren’t going to a nursing home, but chances are someone you love will. In fact, about 50% of the population spends time in a nursing home sometime during their life. If that loved one runs out of money to pay for their own care in a nursing home, and if they don’t have long term care insurance, they are out of options. They must apply for Medicaid, the federally funded program that pays for nursing home care after someone runs out of money to pay for nursing care themselves.

After I speak with people about this threat I often hear, “Even if I spend all my other assets, my house is protected, so I really have nothing to worry about.” In some respects, the house is protected, at least while you are alive. The rules that govern Medicaid eligibility allow a person who needs nursing home care to keep their house as long as they have “the intent to return home.” In Medicaid-speak that means that Medicaid will not take your home while you are alive.

However, the organization that administers Medicaid keeps a running tally of the amount that they have spent on a person’s care after they qualify for the program. Additionally, Medicaid has the right to put a lien on that person’s house while they are still alive so Medicaid can guarantee it gets paid when the home sells or the owner dies. After the owner passes away, Medicaid can either foreclose on the lien or initiate estate recovery of the money they spent that person’s care, either way, Medicaid will be entitled to take back out of the equity in the house everything they’ve spent.

On top of all of this, Medicaid has a cap on how much a home can be worth before someone will even qualify for the program, so those that are fortunate to have bought a house in the right neighborhood may not qualify for Medicaid because their house is worth to much.

So while Medicaid will say that the house is protected, they aren’t quite telling the whole story. We don’t want you to be both out of money and out of options, that’s why a meeting with us can help you discern how and when to plan for the nursing home spend down. We employ sound legal strategies to make sure that allow you to keep your home not just while you are alive, but for your children and grandchildren as well.