Don’t Forget Long-Term Care Costs When Planning Your Estate

When discussing estate planning with clients or potential clients, the meeting usually begins with questions about who will receive property, who will make medical and/or financial decisions upon incapacity, and how to minimize taxes  and the costs of estate administration.  Most individuals tend to shy away from discussing how to pay for long-term care or nursing home expenses as it is not easy to talk about the unpleasant thought of needing nursing home care.  No one wants to go into a nursing home. I believe many families are sincere when they say they will not let mom or dad go into a nursing facility or they will care for them at home.  Sometimes, however, it is just not safe for someone to remain at home and skilled nursing care is the only option.

Long-term care expenses can cost six figures annually in some states, and generally speaking are not covered by Medicare or your private health insurance policy. Although there are several strategies to protect your assets in the event you require long-term medical care, we will focus on two of the more common financial and legal strategies for this article.

Long-Term Care Insurance

Long-term care insurance policies should be considered as an option to pay for long-term care in the event care is needed.  There are different options for coverage, so discussing your needs with a qualified insurance representative and elder law attorney is very important to ensure you are protected.

Irrevocable Trust

Asset protection using an irrevocable trust is another option to protecting your assets from estate recovery should you need long-term care. Because of the 5-year look-back period rules involving trusts, this type of planning must be done at least five years before the need for long-term care and the filing of a Medicaid/MassHealth application. A consultation with a qualified estate planning and elder law attorney is highly recommended if considering an irrevocable trust strategy.

As discussed above, we discussed only two strategies for purposes of this article. Each family’s situation should be discussed on a case-by-case basis to determine what strategies are appropriate.  Many different factors such as health, family dynamic, assets/income, and whether we are working with a spousal couple or single/surviving spouse are a few examples of the factors we must evaluate to determine what options our families have.  Please call our office to schedule a consultation to discuss what’s best for your family.

Alternatives To Nursing Home Care

Many seniors choose to stay in their homes, apartments or assisted living facility despite significant care needs.  This can, however, present considerable challenges to adult children who are trying to balance their own family responsibilities with coordinating care for a parent, as well as for a spouse who may be faced with being a primary caregiver around the clock for an indefinite period of time.

Unfortunately, many elders have an ongoing need for assistance in order to remain safe in their home.  Such a need for assistance can be the beginning of a difficult and frustrating journey for both the elder and their family.  Families try valiantly to meet all the care needs their loved one  may have but often they realize they can’t do everything, or caregivers may become burnt out and resentful.

Fortunately, there are a number of options for services available to families in such a situation.   These services include homemaking, laundry, food shopping, and meal preparation as well as personal care, safety checks, and meals-on-wheels.  These services can be coordinated to ensure the elder can maximize their chances of remaining safe in the community and hopefully avoid the need for placement in a long-term care facility.

A comprehensive analysis by an Elder Law Attorney is a valuable step in the process of creating a successful plan of care for a loved one in need.  Such an analysis can reveal more options for finding affordable care in the community while planning for the possibility that long-term placement in a facility may be needed.  Some individuals can qualify for Community Medicaid Benefits and then be eligible for expanded home services through their ASAP or other Medicaid subsidized home care programs such as PACE (Program for All Inclusive Care for the Elderly).

There are significant differences in eligibility for each Medicaid program, so the analysis should be done by professionals with experience in working with both Community and Long-Term Care Medicaid.   Please call our office for more detailed information on community based programs or to schedule a no-cost initial consultation.

Caregiver Contracts On The Rise

A recent study by the AARP found that nearly a quarter of the adult population are providing voluntary care for family members and friends.  As the population ages and people live longer, this number is sure to rise.  To reward these caregivers, parents often would leave an unequal inheritance to the caregiver child.  Often these unequal inheritances would lead to family feuds.

One alternative to an unequal distribution to a caregiver is to hire the caregiver and pay them for their services.  This is accomplished by drafting a “caregiver contract”.  This option allows the elder to acknowledge the time, effort, and services provided, and possibly eliminate the feud inherent in unequal distributions at death.

Caregiver contracts, by listing what duties or services the caregiver will provide, will often open the lines of communication and encourage families to discuss the arrangements to care for the elder.  If there is family communication, most times additional family members will assist the caregiver in providing certain services.  This often times will minimize family disagreements pre- and post death. 

Be sure to discuss your personal situation with a qualified elder law attorney as there may be tax consequences  or if your goal is to qualify for medicaid benefits.

Protecting Assets From The Costs of Long Term Care

WHEN IS THE RIGHT TIME TO BEGIN PLANNING?

As everyones financial and medical backgrounds are different, so is the “right” time to begin planning.  The more time you have to plan before long term care is needed, the more options you may have and less stress you and your family will endure.  Anytime you have a concern about how you will pay for long term care for yourself or a loved one, it  may be time to begin the planning process.  Preemptive planning will give you peace of mind and allow you to:

  • Analyze your financial background
  • Ensure your legal documents are up to date and distribute your estate as you wish
  • Make sure the distribution of your estate will not jeopardize public benefits for others
  • Discuss options to allow loved ones to remain at home instead of a nursing home
  • Take steps to protect and preserve your assets, including your home
  • Research all community benefits programs applicable to your situation
  • Designate agents to make medical and financial decisions for you in the event you are unable to make decisions for yourself

Long term care, incapacity and death are not subjects we are comfortable discussing.  The earlier and more comprehensive we plan, the less stress our families will be faced with in the event uncomfortable decisions need to be made.

What Is Elder Law?

Elder law is an area of law that encompasses any legal issue facing the elderly.  It is often associated with estate planning but can involve much broader social, economic and health related difficulties facing aging Americans. Some of the concerns that become more important to us as we grow older and may require more careful planning include:

  • estate planning
  • planning for a long term medical care requirement including Medicaid planning
  • planning for incapacitation with the use of durable powers of attorney and health care proxies
  • issues requiring guardianships and conservatorships
  • elder abuse and other issues involving nursing homes or skilled nursing facilities
  • SSI, SSDI and other government benefit programs
  • special needs trusts

As the elderly population grows each year, so will the issues facing these individuals requiring a comprehensive estate plan that addresses long term care needs.  Often times, planning  must take into account strategies involving financial planning, estate planning, and other asset protection techniques.  Other times ancillary issues involving home health care, skilled nursing facilities, long term care insurance and disability benefits must be addressed.  Elder law attorneys, geriatric or nurse case managers, financial planners and professional well versed in benefits planning are often involved to ensure all needs are met.  Advanced planning can help to minimize the problems and stress associated with these issues.

Review Finds Nursing Home Quality Varies By Region

A recent review by the Associated Press found that the quality of nursing homes across the country varies widely by region.  Data from the Centers for Medicare and Medicaid Services found that better care is often found in areas with higher income levels.  Massachusetts is no different, as statistics revealed that nursing homes in wealthier counties across the Commonwealth ranked higher than nursing homes in counties with lower incomes.  Read Full Article

For assistance with finding the right nursing home in your area, USA Today offers a search tool to help you find a facility that fits your needs.  It rates facilities based on three factors; health inspections, quality of patient care and staffing.  This tool allows you to search by entering the name of the facility, or by searching for facilities in your city and State.  Search Here