Stapleton Elder Law

Sensible Planning for Long Term Care Costs

Most think of long-term care as taking place in nursing homes.  However, in actuality, most long term care takes place at home. Changes in the insurance industry might lead to cost-effective ways to address this expense.

If you ask the average senior about long-term care (LTC), they are just as likely to throw up their hands and say that both nursing home care and LTC policies are just too expensive. If they haven’t already got a plan in place, they aren’t likely to start investigating one at this stage of their lives.

But that could change. If the long-term care insurance industry focuses more on helping people cover home-based services, policies would be more affordable and more appealing, says Kaiser Health News in its recent article, “How To Get Long-Term Care At Home Without Busting The Bank.” Most people see long-term care as a home care problem, and they can see a benefit to insuring people for the likelihood of where care is going to be needed first: at home.

However, people are using home care, and a smaller percentage are using nursing home care. People think they may begin needing care at home but eventually will need care in a facility. Research shows that is not true. People are usually able to stay at home for the entire time.

 There are currently more than 6 million older Americans who have a “high need” for long-term care, according to the U.S. Department of Health and Human Services. That’s defined as requiring daily assistance with at least two activities (eating, bathing, toileting, dressing, continence or transferring from a bed to a chair) that lasts at least 90 days or a need for substantial assistance due to severe cognitive impairment.

It’s estimated that about 52% of adults reaching age 65 today will need these services, with half needing it for two years or less, 12% for two to four years and 14% for more than five years. However, fewer than 10% of older adults have purchased long-term care insurance. It’s dropped in popularity, as premiums increased and insurers left the market. No one knows if the industry can fix its major problems.

It may be your goal to cover several years of home-based care—not nursing home care. If so, you could buy a less expensive policy with fewer features. The average annual cost for care provided by a home health aide was about $46,000, compared to $82,000 for a semiprivate room in a nursing facility. That’s about six hours of care, seven days a week. Although it is not enough for seniors with serious, disabling illnesses, it could work to relieve an unpaid family caregiver who is on-call 24/7.

If you end up needing nursing home care, you could look at a “qualified long-term care partnership policy.” It’s available in every state except Alaska, Hawaii, Illinois, Massachusetts, Mississippi, New Mexico, Vermont, and Washington, D.C. These little-known insurance products are designed to help seniors preserve their assets, if they become seriously ill, require nursing home care and want to be eligible for Medicaid. That program pays for about 50% of nursing home costs in the country.

To qualify for Medicaid, most states have strict assets limitations.  However, with a partnership policy, every dollar received in long-term care benefits is exempted from Medicaid’s asset test and protected from seizure by the state.

There are a number of unknowns about partnership policies. There does not appear to be any reliable statistics on how many people who own them eventually turn to Medicaid to pay for nursing home care, nor is there information on the number of partnership programs that have been sold or the size of benefits that have been paid to policyholders.

To start preparing, seniors are advised to get a clear picture of the average home care and nursing home care costs in their state, so they have a better understanding of what kind of coverage they need. Consult with an elder law attorney to talk about options and make LTC planning part of your overall estate plan.

Reference: Kaiser Health News (July 27, 2017) “How to Get Long-Term Care at Home Without Busting the Bank”

Please visit our website to learn more about long term care planning.

If You Want to Live Longer, It Helps to Be Rich

Some of us are living longer, but it’s a select group.

The numbers are chilling. The Society of Actuaries has decreased its life expectancy for 65 year old Americans by six months, and the health of middle-aged, non-Hispanic white Americans is deteriorating fastest, according to an article in Trust Advisor, “The Rich Are Living Longer And Taking More From Taxpayers.”

These trends show a widening gap between wealthier and poorer Americans. The richest people in the U.S. are getting several years of extra life and are also reaping a financial reward for their longevity. These trends will be important with any changes to Social Security, Medicare and other programs. A mere tweak to one of these programs—like retirement age or benefit formulas—may impact the rich and poor quite differently. The researchers wanted to see how long Americans can expect to live based on their income, focusing on earnings in midcareer, from 41 to 51 and using Social Security data.

In 1980, a 50-year-old man in the wealthiest 20% of the income distribution could expect to live five years longer than a 50-year-old man in the lowest-income group. In 2010, the gap between them increased to 12.7 years. The poorest 20% of 50-year-old American men can now expect to live just past 76, six months more than the previous generation. The richest 50-year-olds should make it almost to 89—seven years longer than their parents’ generation.

An important result of this 13-year life expectancy gap is the fact that Social Security and Medicare are becoming a much better deal for well-off Americans. Thirty years ago, the richest and poorest retirees could anticipate roughly the same amount of benefits out of government programs. The richest received larger Social Security payouts by qualifying for higher checks and by living longer. The poorest got more out of government programs. Medicare benefits were about the same for each group.

Now as wealthier people live longer, they can expect to collect a lot more from Social Security over their lifetimes than the poor. In 1980, a wealthier 50-year-old could anticipate collecting $103,000 more than a poor American. Fast forward 30 years and the gap was $173,000. This shows that Social Security is becoming significantly less progressive over time, due to the widening gap in life expectancy.

Some theories about this notion cite rising levels of substance abuse, obesity, and suicide. Others look at how economic inequality drives health inequality. The cost of good health care has skyrocketed—even for those technically covered by insurance.

It is admittedly grim, but retirement planning needs to take into account your expected life span. How long you will live also impacts when you decide to file for Social Security benefits. On a national scale, life expectancy trends have an impact on public policy and legislation. For now, the bigger question is how to address the decreasing life span of Americans.

Reference: Trust Advisor (April 24, 2017) “The Rich Are Living Longer And Taking More From Taxpayers”

To learn more about planning for your retirement and beyond, please visit our website.

Home Health Care Services: Funding Sources

How do people manage to find and pay for home health care services? One part of the problem is explored here: funding support.

It can be overwhelming to learn that a loved one needs to receive in-home healthcare services. Will the person ever regain their ability to care for themselves? What kind of person should be taking care of your loved one? What is the best source for care? How will the care be paid for?

Miami's Community Newspapers’ recent article, “How to Pay for Home Healthcare without Going Broke,” says that many funding resources for in-home services may cost very little or nothing. There are some funding resources for seniors who don’t qualify for government programs. However, bear in mind that some carry financial risks. An experienced Elder Law attorney can help you find the best options for your circumstances.

There are also several different types of caregivers for senior caregiving. You should learn about various roles, since their funding is from different sources.

Personal Care. There are many names for personal care assistants like home care aides, custodial care aides, personal care assistants and companionship aides. They help seniors with hygiene and grooming activities. These caregivers are self-employed and aren’t required to have any certification, licensing or insurance. They typically charge 20-30% less than workers from home health care agencies and you can usually get one on short notice. Medicare doesn’t cover funding for personal caregiving alone. As a result, most families use personal savings for this service.

Home Healthcare. Home healthcare aides (HHA) or certified nurse aides (CNA), personal care aides (PCA) and geriatric workers are considered skilled care. They perform duties like taking a pulse or monitoring blood pressure and personal care. They help with medication management and medical equipment, and provide a higher level of care. HHAs usually work with home health care agencies that have state certification to bill under Medicare and are bonded, licensed and insured.

Seniors who need these types of care, should look for funding for home healthcare in several areas:

Medicare and Veteran’s Administration. Two primary sources of funding for skilled senior care are Medicare and the Veteran’s Administration. Home health agencies take care of the billing.

Medicaid. Some in-home healthcare services may not be covered under the Medicare or Veteran’s Administration plans, so seniors with Medicaid may need to bill for some medical services separately.

State Programs. The Older Americans Act offers funding to states for Meals on Wheels and meals served in senior centers. It also funds programs for health promotion and family caregiving support.

Personal Funding. Maximize federal and state funding before you use your personal finances. There are several ways to finance uncovered costs like your personal savings, annuities, long term care insurance, a reverse mortgage, life insurance policy conversion, home care loans and a home equity line of credit.

Ask a Professional for Advice. There are a number of professionals who can help you figure out the best way to pay for the care, if you need to tap into personal funds. An Elder Lawyer or an estate planning attorney will be able to make recommendations for geriatric care managers or eldercare resource planners. An estate planning attorney will be able to help you understand payment options  and how paying from personal funds will impact the person’s financial health and estate plan.

Reference: Miami's Community Newspapers (March 21, 2017) “How to Pay for Home Healthcare without Going Broke”

To learn how we can assist you plan for the cost of long term health care, please visit our website. 

Planning in Advance: How to Help Your Aging Parents

 A longer lifespan is a wonderful blessing for many, but for others a longer lifespan doesn’t always translate into an enjoyable quality of life. Lengthy chronic illnesses lead to exponentially increased healthcare costs. This requires advanced planning.

It rarely comes the way that you expect it. One second your parents are planning their next trip in the RV, and then you mom breaks her hip in a serious fall and your dad is diagnosed with congestive heart failure.

How the devil did this happen? This is the basic question asked by Chicago Now in its recent article, “Getting Old Sucks: Why To Start Estate Planning With Your Parents.” As the article puts it: “you are officially on the rollercoaster ride to elder hell.”

Fortunately, there are things you can do on this bumpy ride to make it easier on you and your parents. While it’s uncomfortable at first discussing the topic of death with your parents, it’s necessary and important.

Talk to them about estate planning and make sure that they have wills, durable healthcare and medical powers of attorney (POA), and health care directives. If your parents don’t have these documents, you should make an appointment with a qualified estate-planning attorney and get this completed as soon as possible.

For example, what if your father has a debilitating stroke, doesn’t regain consciousness, and needs 24/7 medical support indefinitely? Without a health care directive, the hospital will keep him alive, even in a vegetative state, until he passes naturally.

You’ll be unable to have him removed from life support, unless you can show the physician and hospital administrators his legally valid health care directive and his medical POA that details his wishes. Without these estate planning documents, you and your mother will have limited control on how he should be treated.

From a financial standpoint, it is important to remember that the hospitals will continue to bill you even when your father is on life support and technically brain dead. After 100 days of Medicare coverage, your mom will be fully responsible for these care and treatment expenses, if there’s no supplemental insurance.

Your best and only defense: start talking with your parents about how they want to live, age and what kind of end-of-care life they want. Don’t hope that it resolves itself. This usually leads to emotional, legal and financial disaster.

Once you have your parent’s estate plan in place, start on your own. The same estate planning attorney who was able to help you with your parent’s estate, will be able to help you and your family too. Estate planning is necessary at every stage of life.

Reference: Chicago Now (March 7, 2017) “Getting Old Sucks: Why To Start Estate Planning With Your Parents”

Please visit our website to learn how we can assist you to encourage your aging parents to plan in advance.

Shortage of Home-Health Aids in New York Expected to Become Worse

Many people would prefer to receive care at home, rather than in a nursing home.  However, a lack of health aides combined with an aging population is taking away that choice for seniors.

With few incentives, demanding tasks and less than $13 an hour in pay, it should be no surprise that there is a shortage of home-health aides. As the lowest paid workers in New York’s health care system, as reported by The (Plattsburgh, NY) Press-Republican in “Home health aide shortage leaves some without care,” there are fewer and fewer takers for these low-paying, physically demanding jobs.

"There are just not enough bodies to fill the home-care staffing jobs," said one attorney with the Center for Elder Law and Justice, which provides legal services to seniors and income-eligible people in Niagara County and seven other western New York counties.

Advocates for New York’s home-care industry say the state is experiencing a strong demand for health-care aides. The shortage is expected to become more acute in the next 10 years. There are estimates that 20% of New Yorkers will be 65 years of age or older by 2025, and many will need to depend on public programs to pay for the services.

Home-care providers in New York say they’re being squeezed by what they call inadequate Medicaid rates, resulting in the need to close offices and eliminate services. The state offered short-term funding to fill the gap, but because of the continuing aide shortage, some agencies are unable to provide care that’s been authorized. As a result, patients face a high risk of being hospitalized or placed in nursing homes when they could be staying in their communities, if more aides were hired.

However, state Medicaid Director Jason Helgerson believes the rates offered by the state to the home-care agencies are adequate and that it will increase its support for the sector by $4.9 billion over the next five years. Helgerson contended that New York is more generous to the industry than any other state.

The New York Assembly Committee heard from more than 40 people, who urged them to find a long-term solution to the workforce shortage. Rural counties are already in crisis mode, according to one lawmaker. The hope is that the Assembly will attempt to get more state support for the managed-care plans that fund many of the agencies.  However, no specific wage level has been suggested. Home health aides can earn higher salaries at fast-food restaurants, and there are few incentives for them to remain at these low-paying, difficult jobs.

Reference: The (Plattsburgh, NY) Press-Republican (March 4, 2017) “Home health aide shortage leaves some without care”

To learn how we can assist you or a loved one plan for long term care needs, please visit our website.

When Caring for an Elderly Parent Becomes a Second Job

More than 45 million Americans take care of an elderly family member, usually an aging parent. This can have negative impact on their own family, from finances to strained relationships.

It only seems fair: your parents took care of you when you were young, and now they need your help. Aging parents often need adult children to handle medical care and finances, when they can no longer manage on their own. When the level of care spills over into the adult child’s own finances and impacts their careers, it can become a hardship.

MarketWatch’s article, “Read this before becoming your parents’ caregiver,” reports that, in many instances, the adult child caregiver is still able to maintain a full career and family life. However, in certain situations, the family member who’s assumed the role of a full-time caregiver must reduce his or her work hours or forego a promotion because of the time commitment. In the majority of situations, we see adult children answer the call of caregiving in a crisis when there’s an imminent need. A short-term assignment can be doable for a professional with his or her other family and personal responsibilities, but when the duties last longer, he or she will realize there isn’t enough time or resources to do it all.

A caregiver needs to take the actions necessary to help without putting his or her own family’s financial future at issue. When there are siblings and other family members involved, it is necessary to communicate realistic expectations of what areas of care are needed, responsibilities, time commitments and whether there will be any financial compensation.

A Personal Care Agreement can be a good guideline.  It will help to detail which individuals are responsible for various aspects of care, the amount of time required and any compensation. The biggest question that people have about this agreement, is how to get paid to be a family caregiver.

A Personal Care Agreement can give an adult child caregiver the peace of mind and security that he or she won’t suffer undue financial consequences, as well as provide clear details for other family members as to the expectations when assuming these important caregiving responsibilities.

This agreement can help avoid some of the misunderstandings that can occur when many siblings and loved ones are trying to help (or fail to pitch in). It also can protect a family member who is losing his or her own income and time to provide caregiving. This is because reduced hours or an exit from the workforce to care for a loved one, can have a major personal financial impact. In addition, the time for a personal and immediate family life with one’s own spouse and children can nearly evaporate with caregiving demands.

An Elder Law attorney can help create a Personal Care Agreement that will protect you from any accusations of financial elder abuse and clarify the responsibilities and role that you have taken on as the parent’s primary caregiver. This will also protect you from any charges that care payments were a way of hiding assets from Medicaid.  It is also suggested that you hold a family meeting, with the Elder Law attorney, if necessary, so that all family members understand the situation.

Reference: MarketWatch (February 22, 2017) “Read this before becoming your parents’ caregiver”

To learn more about creating a Personal Care Agreement (or Personal Care Plan), please visit our website.

Save Yourself and Family Members the Stress and Expense: Plan

It is possible for anyone to become incapacitated or die prematurely. Estate planning in advance can help you and your family.

Live long enough, and you learn that death can strike in a heartbeat. The healthiest person can become incapacitated. It’s not pleasant to think about, but the reality is, having an estate plan in place is the wise way to go, according to The Arizona Jewish Post in “Estate planning and elder law benefit all ages.”

Estate planning and elder law attorneys say that everyone needs these three documents—a will, a health care power of attorney, and a financial power of attorney.

A will. If you die with no will, state law has a pecking order as to who will inherit your assets, starting with your spouse and children. A valid will must be signed by the person who wrote it, witnessed by two non-relatives who saw them sign and notarized as to the identity of the signer and witnesses.

Your will should name a personal representative, otherwise known as an executor. This should be done far ahead of time to be certain that they are willing and able to undertake the task. Let this person know the location of a copy of your will.

A living will details your end-of-life choices. Without authorized directions, your family may not be able to make the decisions you’d want. A living will can also include funeral wishes.

A medical power of attorney gives the individual you select, the authority to make health care decisions for you, if you’re incapacitated.

A financial power of attorney lets your appointed agent make financial decisions, pay your bills, and take charge of your bank accounts if you’re unable to do so.

A revocable living trust is a document that lets you assemble all of your assets in one place. The assets must be retitled to the trust, not to you as an individual. A trust can help with out-of-state real property or leaving money to a child with special needs who is receiving means-tested government benefits. When you die, the assets in the trust aren’t subject to probate, and are distributed as you instructed in the trust.

An experienced estate attorney will take you through all of the steps to analyze your situation, review assets, family relationships and all of the information needed to create an estate plan that will give you peace of mind and protect your family.

Reference: Arizona Jewish Post (December 2, 2016) “Estate planning and elder law benefit all ages”

To learn more about planning before a crisis, please visit our website.

Know When to Hold and When to Walk Away

There are times when it makes more sense to turn down an inheritance than to welcome it.

It’s the thing movies are made of: a distant relative who you met only once has made you the heir to his or her entire estate. You’ve got money and other assets coming your way—minus the emotional turmoil of losing a loved one. Still, you need to take a closer look, warns The Street in its article, “Why You Might Want to Refuse That Inheritance.” You may realize that sometimes it’s best that this scenario remains a fantasy.

There are several reasons for an heir to disclaim or say “no” to an inheritance. In many cases, it’s to redirect the money within the family to a more tax-efficient recipient. For instance, a gift might bump your own estate over the federal estate tax limit of $5.45 million for an individual or $10.9 million for a couple. When you reach this threshold, estates are hit with a 40% tax. If a named beneficiary would expect to incur estate taxes on his or her death, a smart move would be to save on taxes and disclaim an inheritance to a child with a smaller estate.

Another use of disclaiming is to redirect assets to a member of the family who needs the money more than the original beneficiary. Children who are financially secure may want to disclaim assets they were to receive in a parent’s will to allow those assets to help support a surviving parent. When a person passes away without a will in many states, half the estate goes to the surviving spouse and half to children—but that may leave the surviving spouse short on funds. As a result, when it is time to settle the estate, a child can use a disclaimer to return a portion to the surviving parent.

In addition to disclaiming by wealthy families to reduce estate taxes, less-affluent families may also see its application when a beneficiary has creditors who might try to claim inherited assets. It may be smart to direct those assets elsewhere.

This can also help elderly family members who need nursing home care that Medicare doesn’t cover. Medicaid pays for long-term care—but only when recipients have exhausted all of their own assets. One idea is to spend down a nursing home resident’s assets so he or she can qualify for Medicaid. In addition, claiming an inheritance may delay the timing of when Medicare starts paying for long-term care. Disclaiming could protect an inheritance from being consumed by nursing costs and keep it in the family. However, disclaiming may not always be possible—if an heir is already on Medicaid, the state-run health program might contest an attempt to disclaim an inheritance that—if claimed—would make the individual ineligible for Medicaid.

A few final details: you have nine months after the person’s date of death to disclaim an inheritance, but it is best not to delay. Why? IRA custodians may cash out IRA accounts on their own initiative and mail checks to beneficiaries. If you cash one of those checks, it could make it difficult for you to disclaim. To disclaim, you may not benefit from the assets. Also, you must notify the estate executor about your intent to disclaim in writing and using registered or certified mail. Disclaiming an inheritance is one of those things that cannot be reversed, so think carefully and be sure this is really what you want to do.

Reference: The Street (August 30, 2016) “Why You Might Want to Refuse That Inheritance”

To learn more about estate administration, probate, and inheritance matters, please visit our website.

Will You Need to Apply for Medicaid?

Applying for Medicaid is not for the faint of heart, and the level of care covered by Medicaid may be far lower than what most middle-class Americans have come to expect.

People put off thinking about or planning to apply for Medicaid because there is nothing pleasant about it, from coming to terms with being ill and impoverished to sharing a nursing home room with a stranger, according to USA Today in "Navigating Medicaid for elder care can be as painful as the ailments." Depending on the policies of your state, you may not be able to spend your final days or years at home.

Up to 30% of Medicaid funding covers long-term care, which is roughly $100 billion annually. More than two-thirds of older adults will require some personal assistance before they pass away, and nearly 50% will need care to such a level that they'd be eligible for private long-term care insurance or Medicaid.

If you want to explore sheltering assets so you can qualify for Medicaid sooner rather than later, then you should talk to a qualified Medicaid attorney. You don't want to be without expert counsel, especially when making hard decisions on how to allocate money you've saved all your life.

A year of nursing home care can run upwards of $90,000, which means savings are going to run out quickly. Some folks start to transfer assets to their children earlier so they can have an inheritance. These transfers may be subject to a "lookback" or penalty period if they happen within the five years before the elderly parent's application for Medicaid.

Medicaid is governed by both state and federal laws, so there are some variation depending where you live as to what it covers and what you can keep. Here are a few general tips to consider:

• Medicaid rules say that to qualify, an elderly widow or widower can't have more than $2,000 in "countable" resources.
• Most Medicaid recipients can still receive Social Security benefits; however, nursing homes can access these funds to pay for the cost of the room in addition to Medicaid coverage.
• The elderly can retain their homes for six months in the event they recover (unless it's worth more than $520,000), then they can either apply for a six-month extension or sell the house to pay the nursing home.
• For a senior couple, a house and a car for the spouse and certain items of personal property, like wedding rings, are exempt when calculating eligibility for Medicaid—the spouse can also keep half of countable resources up to $119,220.

Applying for Medicaid benefits is a complex task that requires the help of an experienced elder law attorney. Families need to be involved with their spouses or parent's finances and medical records, which can be voluminous. Like many of the issues concerning severe illness or end of life care, it is best to have a plan in place, discuss the situation with the family and with the help of an elder law attorney.

Reference: USA Today (March 26, 2016) "Navigating Medicaid for elder care can be as painful as the ailments"

To learn more about Medicaid and your estate plan, please visit our website. 

Hawaiian Advocates Preparing for Growing Dementia Population

A task force and Alzheimer's Association Aloha Chapter are working to prepare professionals to meet the needs of dementia patients. A new phrase, "dementia capable attorney" may be on the horizon in the same way that "elder law attorney" is used for legal issues specific to the elderly.

A robust and growing group of Hawaiians over age 65 were diagnosed with Alzheimer's in 2014: roughly 25,000 in total. Advocates, including members of a dementia task force under the Executive Office on Aging and members of the local Alzheimer's Association, are focusing on preparing professionals and caregivers to address the often complex needs of individuals with dementia.

A recent article in KHON, titled "Task force aims to help seniors living with dementia" recently reported on this.

James Pietsch, the director of the University of Hawaii Elder Law Program, told KHON that there are multiple tasks under this task force, one of which is supportive research to determine whether professionals are qualified or capable of handling these type of cases. Professionals like doctors, social workers, nurses, and lawyers need to be better prepared to handle issues involving dementia.

Pietsch explained that the group is trying to develop a core of individuals—attorneys who are dementia capable—a term being used to describe an attorney who would be comfortable handling issues relating to dementia.

The dementia task force is trying to make life easier on dementia patients and their caregivers. They want to educate them on complicated issues like Medicare, Medicaid, advanced directives, and power of attorney laws. They also want to educate these individuals who can help change those laws to reflect a growing need to make it easier for families who are navigating this very complex area.

As more and more baby boomers reach retirement age, dementia cases are expected to increase. Whether your family has ever experienced dementia in the past or not, now is a good time to do proper estate planning so that any issues can be discussed and your wishes documented in advance of the impact of any kind of age-related degenerative illness.

Reference: KHON (November 26, 2015) "Task force aims to help seniors living with dementia"

To learn more about creating an estate plan that reflects your wishes, please visit our website.