Creative Financial Approaches to Long Term Care Services

Medicaid word cloudCreative Financial Approaches to Long Term Care Services

Long term care insurance was sold aggressively in the 1980s, 90s and thereafter to offset the costs of seniors needing to live in a nursing home, assisted living or needing at home health care. Now, however, the business of long term care insurance has dramatically changed. What was once over 100 insurers providing LTC policy for sale has shrunk to a pool of less than twenty insurers who continue to sell the health care product. The big financial problem was that the majority of insurers had badly underestimated the longevity of these long term care policy holders and how many claims would be filed during their lifetime. The model became unsustainable from a business perspective.

As reported by the Wall Street Journal (https://www.wsj.com/articles/millions-bought-insurance-to-cover-retirement-health-costs-now-they-face-an-awful-choice-1516206708) the industry is now in financial turmoil and has turned to the old adage of privatize the gains and socialize the losses; the translation being that millions of people age sixty-five or older with long term care policies are facing steep rate increases. It is not uncommon for a policy holder to face a fifty percent increase in their premium while some of the worst cases are upwards of ninety percent. Because the industry itself used such poor benchmarks and miscalculated projections, policy holders are seemingly left with two choices: Pay the money or leave your coverage after paying into it for years, and sometimes decades.

What if you want a different choice? Everyone would agree that being priced gouged for premiums as you age is inherently unconscionable but if the policy is discontinued what then will happen to the peace of mind long term care brings? What was once the safety net of senior aging care (without becoming a burden to family members) is rapidly disappearing.

CNBC has recently reported about this very issue and suggests getting financially creative for long term care. (https://www.cnbc.com/2018/02/27/heres-a-surprise-source-you-can-tap-for-long-term-care-services.html) There is a surprising source that you can tap in order to maintain protection for yourself but it requires planning, professional help and time. Do not delay.

The financially creative premise is to become asset poor, impoverished, and qualify for Medicaid which pays for nursing home care and services. This does not mean the legacy you built during your lifetime will not go to your selected inheritors. On the contrary the assets you own must move out of your name to qualify for Medicaid. The assets will then shift to your designated beneficiary since to qualify you as an individual cannot have over $2,000 in assets.

To begin you will need to retain the services of a qualified elder law attorney, who may also bring in an accountant and a financial advisor. Ideally, you will be able to wait five years before needing long term care and the help of Medicaid. If there are assets transferred during the “five year lookback” it may be subject to penalties or make the applicant ineligible for some period of time requiring them to pay out of pocket.

Now with time on your side it becomes critical to select the right vehicle for transfer. These can be annuities but more often tend to be irrevocable trusts. The assets in the irrevocable trust are no longer under the control of the older person and can provide protection from certain creditors. The vehicle chosen for transfer of assets is very important not only for the older individual but the recipient as well. In the case of an outright gift of appreciated assets (i.e. stocks or real property) there would be no stepped up cost basis which could lead to crushing capital gains taxes when it is time to sell. An elder law attorney with input from your accountant and financial planner can help you choose the right transfer of wealth plan.

Elder law attorneys are closely watching changes in Medicaid, as Congress is often proposing legislation to change the program.. Be certain your elder law attorney is up to speed on the current requirements, as the eligibility requirements can change very quickly in each state, and sometimes each county.

Though you may never have thought you would find yourself creatively trying to qualify for Medicaid while protecting assets, the current long term care premium prices preclude a large portion of seniors from being able to pay the cost of the policy. Genworth Financial reports the national median cost of a private nursing home room to be $97,455 a year. It doesn’t take long to be wiped out at that cost without long term care. Medicaid may be your solution and time is of the essence for planning.

Contact our office today at 267-288-5765 and schedule an appointment to discuss how we can help you with your planning.

Understanding Hospice Care

Helping hands.What is Hospice care?

Hospice care can be very difficult for families to come to terms with, but can be a beneficial care option for those caring for a terminally ill loved one. The purpose of hospice care is to provide comfort and quality of life for a terminally ill person. Hospice care can allow the patient to remain at home and can provide ways to alleviate pain and make the person more comfortable. It is a great option for those who are seriously ill, who have exhausted their treatment possibilities, or who do not wish to continue treatment for a terminal illness.

How is Hospice care obtained?

In order to be placed under hospice care, normally a patient must receive a prognosis from two doctors that the patient has six months or less to live. Since there is no way to be sure how long a patient will live, the patient must continue to qualify every 60 to 90 days.

What are the benefits of Hospice care?

A hospice team will work with other healthcare professionals, including the doctors a patient already has, to coordinate and provide treatment and care. Support for families and caregivers is another benefit of hospice care. The team can help train caregivers to provide care to a loved one. Medical equipment and medications related to the illness will be provided for those in hospice care.

The hospice team comes to the patient wherever they may live. Hospice provides different levels of care including home care, but can also extend to in-patient care in a hospital’s hospice unit.

Respite care is a benefit of hospice care for the family and caregiver. Caregivers are provided through the hospice program so that caregivers can go on vacation, rest, or take care of other matters. Hospice care addresses not only the physical needs of the patient, but also the spiritual, emotional, and mental well-being of the patient receiving hospice care.  Hospice care offers bereavement follow-up and support for families as well.

How is Hospice care paid for?

Terminally ill patients do not normally have to pay for hospice care. Most hospice patients have their care paid for through Medicare and the Medicare Hospice Benefit. Veterans are eligible for hospice benefits provided through the Veteran’s Health Administration, and these benefits are also similar to the Medicare Hospice Benefit. Health insurance may cover some hospice benefits. This can vary among insurers, so it is important to check qualifications and coverage. If the patient has no other way to pay for hospice care, it may be provided on a sliding scale or free of charge.

Hospice care is a beneficial option for helping families care for a terminally ill loved one. The loved one does not have to be moved unless their medical condition requires constant care. They are able to stay in their homes and receive care to keep them comfortable and their pain managed. It is nearly impossible for a terminally ill patient to be turned down for hospice care if they have six months or less to live. Payment options are always available and patients are rarely turned away.

If you have any questions about something you have read or would like additional information, please feel free to contact us at 267-288-5765.

 

Why May is Special for Elder Law Attorneys – Part 2

Adoring A SeniorMay is National Elder Law Month, as designated by the National Academy of Elder Law Attorneys.  It is a way to acknowledge the profession that supports seniors and their families with all of their planning needs. And while that sounds interesting, many people still ask, “What do elder law attorneys do?” In Part 2 of this series, “Why May is Special for Elder Law Attorneys,” we will discuss additional ways elder law attorneys help seniors and their families.

Protection from financial exploitation

According to the National Adult Protective Services Association (NAPSA), one in nine seniors reported being abused or exploited during the past twelve months. Of those who are abused or exploited, only 1 in 44 cases of financial abuse is reported. Sadly, 90% of the abusers are family members or trusted others.

Exploitation or abuse can take many forms, including telemarketing scams, reports of false lottery winnings, a family member taking advantage of a joint bank account or misusing a power of attorney, or in-home caregivers over billing the senior, charging the senior for personal expenses, or outright stealing from the senior. Elder law attorneys deal with these types of issues regularly, and can help families protect against potential abuse or exploitation. Attorneys also work with banks to ensure accounts are titled correctly, and that the proper legal documentation is registered with each financial institution.

Estate planning documents can also play a big part in preventing financial abuse or exploitation from a family member, professional, or stranger. The documents are the result of thoughtful discussion with the senior about who should have access to the senior’s assets, and under what circumstances access should be granted. An ongoing relationship with the attorney allows the senior to modify the planning documents as needed to reflect changes in the senior’s health or financial circumstances, or a change in the family situation.

Discussing end-of-life wishes

In 2016 the country heard about the plight of a husband in Oregon whose wife had advanced dementia and would no longer take the food she was offered. The husband lost his battle in court to force the nursing home to stop spoon-feeding her. Although her health care directive stated that she did not want artificial food or hydration, the court said that the nursing home had an obligation to provide her basic essential needs, including food and water. As a result, other states have become more aggressive in allowing individuals to specify whether they want to be provided food and water if they are suffering from advanced dementia.

Elder law attorneys routinely discuss issues like this with seniors. A related topic includes where the senior wants to live if care is needed, who should provide that care, and how it will be paid for. Most importantly, attorneys make sure the senior’s wishes are documented properly. This helps alleviate stress that a serious illness can place on the family, especially when decisions about end-of-life care have to be made.

It’s all about the senior

Elder law attorneys focus on needs particular to the senior. While a few of the issues elder law attorneys help with have been highlighted here, there are numerous other areas that they help seniors with every day, including review of facility admission agreements, help with family disputes, and proper distribution of assets upon a loved one’s death (often referred to as probate).

If you would like to learn more or we can be of assistance to you or a family member, please don’t hesitate to call our office at 267-288-5765.

 

 

You Against the World? What it Means to “Solo Age”

Although Baby Boomers are living longer, healthier lives, they’re often doing so on their own.solo aging

It’s what’s known as “solo aging,” a term for what happens when a senior has no children or younger family members to help them as they get older.

There was a time when getting older meant going to live in a nursing facility or moving in with younger family members who could help tend to a senior’s needs.

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I’ve Created a Will. What Do I Do Next?

If you’ve created a will, then congratulations: you’ve done more than a lot of people do Estate planningwhen it comes to estate planning.

But your work doesn’t stop there. Your will might address questions about what happens to your assets after your death, but it doesn’t do everything.

This is why you should have an estate plan that includes things such as a living will, power of attorney and health care power of attorney to ensure that you can still meet your medical and financial needs if you ever become incapacitated.

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Why May is Special for Elder Law Attorneys – Part 1

National Elder Law MonthMay is National Elder Law Month, as designated by the National Academy of Elder Law Attorneys.  It is a way to acknowledge the profession that supports seniors and their families with all of their planning needs. And while that sounds great, many people still ask, “What do elder law attorneys do?” Part 1 of this series, “Why May is Special for Elder Law Attorneys” will explore several ways elder law attorneys help seniors and their loved ones.

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What to Consider in Retirement Planning

retirement money

Read up on retirement planning in America, and you come across some pretty startling statistics:

  • One in three Americans have no retirement savings. The same number of people say they expect to work in retirement to supplement their income
  • More than 40 percent of single seniors over 65 get at least 90 percent of their income from Social Security
  • Even healthy couples will pay close to $400,000 on health care in retirement

With all that in mind, it becomes painfully apparent how important it is to plan for retirement, yet it’s a process that many people aren’t even sure how to approach.

With that in mind, we’d like to suggest some questions you should ask to help start putting together your retirement plan.

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Choosing the Right Trustee

Choosing the Right Trustee

When planning for your loved ones’ future, you may consider creating a trust to protect assets set aside for them. If you create a trust, you will need a reliable and trustworthy person to name as the trustee who will manage the trust. Choosing the correct trustee is an important decision because he or she will be responsible for carrying out your wishes when managing the trust.

The trustee will be responsible for duties such as managing investments, paying bills, preparing tax returns, and managing other accounts within the trust.

Before choosing a trustee, consider the following points that will help you determine who will be best suited for the role.

1. A trustee must be over the age of eighteen and capable of managing his or her own affairs successfully.

2. The trustee should be completely trustworthy and committed to the beneficiary’s best interests.

3. The trustee should be able to make sound judgments and have a strong understanding of his or her duties as the trustee. While not required, legal or financial expertise is valuable.

4.  If a person is going to be the trustee of a special needs trust, knowledge of public benefits and how to avoid invalidating these benefits is beneficial.

5. The trustee should be someone who is healthy and will be able to continue managing your trust for many years to come.

6.  A trustee should have the time to devote to managing your trust effectively. If the person you are considering is very busy, you should consider other candidates before making your final choice.

7.  If you don’t know someone who would be a suitable trustee, consider hiring a professional trustee or institution to manage your trust. Professional trustees may include a trust company, accountant, lawyer, or investment manager or advisor. However, professional trustees or institutions do charge a fee or percentage to manage your trust.

8.  Consider co-trustees if you would like to have a trusted friend or family member and a professional trustee manage your trust together.

9.  Understand your family dynamics when selecting a trustee. If you are choosing a family member to be the trustee, try to avoid conflicts between family members and explain to other relatives why you have chosen a particular person to be the trustee.

10. If you make a relative or friend your trustee, decide who will be the successor in the event that the person is no longer able to manage your trust.

After you have chosen a trustee, it is advisable to reexamine your choice every few years to ensure that your trustee is still the best choice for your needs. If circumstances change, you may need to assign a different trustee who is better suited to the required responsibilities.

If you need assistance preparing a trust or choosing the right trustee, contact Newman Elder Law. If you want to learn more about our elder law services, click here.

Source:

http://www.elderlawanswers.com/how-to-choose-a-trustee-15384

Tips on How to Declutter

Tips on How to Declutter The mid to later part of the 20th century has given us many inventions, from the computer to the iPod and much more.  Of course, it’s the “much more” that is cluttering up homes across the country. From old LPs to books that have never been read, we all have items that are taking up space in our homes. It is especially true for the seniors. Many have lived through times of scarcity and feel that they should hang on to items, no matter their level of usefulness. Others have mobility and cognitive issues to deal with and have trouble deciding what to keep and what to get rid of.

What compels people to keep things?  Often there are memories attached to many things. Gifts from friends who have since died, pictures of family members from years gone by, letters from past lovers are a part of a person’s life. Then there is hope, as in, “I hope to lose weight, I hope to get time to read those books, I hope to pick up that hobby again.” Then there is not wanting to be wasteful, as in “I may need that plastic container one day.” Never mind the fact that there are 23 plastic containers in the kitchen, some of which don’t have lids.

So, how do you conquer the clutter?  The short answer is one item at a time. The long answer is that you need to talk to your children or grandchildren about clearing out the house. This talk will be easier if a move to smaller quarters or to an assisted living facility is being planned, since you know that you can’t bring everything to the new place.

Once you are on board with decluttering how do you get started?

One Room, One Closet or One Drawer at a Time

Since it can be overwhelming to get rid of years and years of accumulated belongings, it is best to start with one room, such as the bedroom or the kitchen.  Go through a drawer or closet until you have cleared out all the items that are in the way of the things you use more often.  Throw away what isn’t useful and set aside the rest.  Do the same with the next drawer or the next part of the room.

Set aside some items to give away or sell

Invariably, you will come across something that you don’t want to give to a thrift store or throw out. Maybe a grandchild, a friend or adult child would like it. Or you feel that you could make some money selling the item either online or at a yard sale.  Take this opportunity to ask friends and family members if anyone wants the antique gravy boat or salt and pepper shakers from Disneyland. Give away the items that people want, sell whatever remains that can be sold, and what’s left can go to a thrift store. Most thrift stores will pick up from your home, so you just need to schedule a pick up date and time and let them know how much “stuff” you have to donate.

Leave a Giveaway Box

Despite your best efforts to tackle clutter, new things become old things that become relegated to closets and drawers. Having a giveaway box nearby will help keep the clutter from getting out of hand. When you find something that needs to go, put it in the box. When the box is full, take it to a thrift store or sell the items, so that someone will put the items you no longer need to good use.

Since one person’s “junk” may be another person’s treasure, the best way for someone to find that treasure is get rid of your junk.

Sources:

https://www.caregiverstress.com/aging-issues/senior-hoarding/10-reasons-seniors-keep-stuff/

https://www.psychologytoday.com/blog/the-intelligent-divorce/201403/why-people-hold-stuff

5 Ways for Seniors to Alleviate Boredom

Ways for Seniors to Alleviate BoredomYou finally broke free from the 9 to 5 grind and now retirement isn’t what you thought it would be and you are bored, very bored.  Or maybe you are the son, daughter, spouse of a retiree and you see that person aimlessly watching television for hours at a time.  What can be done to alleviate this problem?  Here are some suggestions.

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