Long Term Care Planning

Estate Planning for a Blended Family?

A blended family (or stepfamily) can be thought of as the result of two or more people forming a life together (married or not) that includes children from one or both of their previous relationships, says The Pittsburgh Post-Gazette in a recent article, “You’re in love again, but consider the legal and financial issues before it’s too late.”

Research from the Pew Research Center study shows a high remarriage rate for those 55 and older—67% between the ages 55 and 64 remarry. Some of the high remarriage percentage may be due to increasing life expectancies or the death of a spouse. In addition, divorces are increasing for older people who may have decided that, with the children grown, they want to go their separate ways.

elderly couple ARAG members
Getting married for the second time? Don’t forget to review your estate planning documents.

It’s important to note that although 50% of first marriages end in divorce, that number jumps to 67% of second marriages and 80% of third marriages end in divorce.

So if you’re remarrying, you should think about starting out with a prenuptial agreement. This type of agreement is made between two people prior to marriage. It sets out rights to property and support, in case there’s a divorce or death. Both parties must reveal their finances. This is really helpful, when each may have different income sources, assets and expenses.

You should discuss whose name will be on the deed to your home, which is often the asset with the most value, as well as the beneficiary designations of your life insurance policies, 401(k)s and individual retirement accounts.

It is also important to review the agents under your health care directives and financial powers of attorney. Ask yourself if you truly want your stepchildren in any of these agent roles, which may include “pulling the plug” or ending life support.

Talk to an experienced estate planning attorney about these important estate planning documents that you’ll need, when you say “I do” for the second (or third) time.

Reference: Pittsburgh Post-Gazette (February 24, 2019) “You’re in love again, but consider the legal and financial issues before it’s too late”

Protect A Life of Saving from Long Term Care Costs

Every month, Lawrence Cappiello writes a check to a nursing home for $12,000 to pay for his wife’s nursing home and long term care costs. Two years ago, his net worth was $500,000. In less than two years, the Cappiello’s savings will be gone. This unsettling story is explained in the article “How to Keep LTC Costs From Devouring Your Client’s Life Savings” from Insurance News Net. He is suffering from nursing home sticker shock and says he should have known better.

With proper planning, long term care costs won’t take your life’s savings

Cappiello was a professor at the University of Buffalo for 25 years. During that time, he taught an introductory course on health care and human services that touched on the costs to consumers. He said it was clear even then, that the cost of long term care was going to escalate out of control.

To qualify for Medicaid payments of nursing home care in New York State, residents are permitted to own no more than $15,450 in nonexempt assets. However, elder law attorneys, whose practices focus on these exact issues, say that the way to protect the family’s assets, is to take steps years before nursing home or long term care is needed. Some general recommendations:

  • Signing over the deed of the home to children or any others who would otherwise inherit it from you in a will. The transaction would need to stipulate that you have life use of the home.
  • Establishing an irrevocable trust, that upon death, transfers the house to the beneficiaries. There must be language that ensures that you have life use of the house.
  • Giving away savings and other financial assets.

Transfers of any assets must take place more than five years before applying for Medicaid nursing home and long term care coverage. If they have been given away or transferred within the five year “look-back” period, then there is a chance that they may still qualify, or they may have to wait five years.

That is why planning with an experienced estate planning attorney is so critical for families, especially when one of the spouses is facing a known illness that will get worse with time. There are steps that can be taken, but they must be done in a timely manner.

Many older people are not exactly jumping with joy at the idea of handing over their assets, even when relationships with adult children are good. The idea of giving up assets and the family home is a marker of the passage of time and the inevitability of one’s own passing. These are not things that we enjoy considering. However, taking steps in advance, can make a huge difference in the quality of the well spouse’s life.

It should be noted that a sick spouse can move assets to a healthy spouse, to make the sick spouse lawfully poor and eligible for Medicaid. There is no look back period or penalty relating to long term care for interspousal transfers. This may sound like a very simple solution. However, these are complex matters that need the help of an experienced attorney. If it were so easy, countless spouses would not be facing their own impoverishment because of an ill spouse’s long term care needs.

Reference: Insurance News Net (Feb. 4, 2019) “How to Keep LTC Costs From Devouring Your Client’s Life Savings”

Countdown to Retirement with Three Simple Questions

To help plan for retirement, it helps to move from asking global questions, like “Can I afford to retire?” to more specific questions, like “What’s my monthly cost of living right now?”

Sometimes retirement planning is so overwhelming that people just shrug their shoulders and hope that things work out. That’s a terrible way to plan for the last two or even three decades of your life. Plus, says Motley Fool in a recent article titled “Don't Even Think About Retiring Until You Can Answer These 3 Questions,” if you can’t answer three basic questions, maybe you’re not ready to start thinking about retirement.

MP900384841Can you believe that just 38% of Americans say they have a long-term financial plan, according to a recent survey? Let’s look at three important planning questions.

When to claim Social Security. Many people think that retirement and claiming Social Security benefits occur at the same time. However, they don't have to. You could elect to retire at age 60 but wait to claim your benefits until you reach 65. Remember that the amount of money you get in benefits is linked to the age at which you start claiming them. Age 62 is the earliest you can claim Social Security. However, if you do, your benefits will be reduced by up to 30% of what they could be. For every month you wait, you'll receive slightly more with each check up to age 70. Your full retirement age (FRA) is the age when you’ll get 100% of the benefits to which you’re entitled. Waiting can have its advantages, but there's no single right answer for when you should start claiming. It all depends on your personal circumstances.

Will your retirement savings last? Take a look at how far your savings will last during retirement. To determine how far your money will go, calculate the amount you'll need each year to get by during retirement. With a number in mind, you'll be able to better determine how long your current savings will last. You might realize that you need more than you anticipated, especially if you're going to be spending several decades in retirement.

Paying for healthcare costs. Healthcare costs are one of the largest expenses in retirement. Know that the average retiree spends about $4,300 per year on out-of-pocket healthcare expenses. A total of two-thirds of that is spent on premiums. It’s important to understand that Medicare will help cover many healthcare expenses you'll face, but it doesn't cover everything.

Circumstances often dictate when people retire; they lose a job in their mid to late 60s or illness prevents them from working. However, even when that is the case, understanding where you are from a financial perspective can help make your retirement work in your favor.

Reference: Motley Fool (October 9, 2018) “Don't Even Think About Retiring Until You Can Answer These 3 Questions”

When the Diagnosis is Alzheimer’s, What Should You Do?

The authors of a new book, “Better Living With Dementia,” say it’s time to break the “cycle of despair”

People who receive a diagnosis of Alzheimer’s disease, an incurable type of dementia, are overwhelmed by hopelessness. But two authors want to change that.

MP900407501The authors of a new book, “Better Living With Dementia,” say it’s time to break the “cycle of despair” that accompanies an Alzheimer’s diagnosis. The Washington Post discussed this new perspective with the well-credentialed authors in a recent article, “Learning To Live Well With Dementia.”

Author Laura Gitlin is dean of the College of Nursing and Health Professions at Drexel University and Chair of the Department of Health and Human Services advisory council on Alzheimer’s Research, Care and Human Services. Her co-author is Nancy Hodgson, the Anthony Buividas endowed term chair in gerontology at the University of Pennsylvania.

These leading experts on care for people with cognitive impairment, say that while there’s no cure for Alzheimer’s, there are many things that can be done to make life better for people with dementia and their caregivers.

At a minimum, people newly diagnosed with dementia should consult with the Alzheimer’s Association, the Lewy Body Dementia Association, the Association for Frontotemporal Degeneration and the government’s website, alzheimers.gov. These are all great sources of information and potential assistance. Individuals and families should also get referrals to elder law attorneys, financial planners, adult day centers, respite services, caregiver support services and other resources.

About 70% of people with Alzheimer’s and other types of dementia live at home. Few professionals ask about patients’ living conditions, even though these environments play a major role in shaping people’s safety and well-being. It’s not uncommon for professionals to fail to let patients know what to expect as dementia progresses. This can fosters isolation, which worsens their sense of despair.

Even small steps could help improve quality of life. For example, give focused attention to the home setting itself. Hire an occupational therapist, ideally with expertise in dementia, to do a home assessment and recommend modifications. It’s also important to know what to expect. Individuals with dementia and their caregivers will find their needs changing as their illness progresses.

Initially, the most critical need may be getting a reliable diagnosis and understanding more about the type of dementia identified by your physician. A new study by Johns Hopkins University reports that 60% of people with dementia haven’t been diagnosed or aren’t aware of their diagnosis.

Further, depression and anxiety may need to be addressed, because people can struggle with the reality of a diagnosis, withdraw from work or social activities and worry about the future. Looking for ways to keep people engaged with meaningful activities can become a challenge.

In the final stage, severe dementia, people need sensory stimulation, like enjoyable music or a fragrant bouquet of flowers. Addressing distress, discomfort and pain are the big care challenges.

The challenge for family members and caregivers is to let dementia patients know that they belong and are surrounded with warmth and affection, at every stage of the disease. Even if they cannot acknowledge the presence of family and friends, their company is important.

Reference: The Washington Post (August 9, 2018) “Learning To Live Well With Dementia”

Need Something Else to Worry About? Try Long-Term Care

A recent article from Think Advisor paints a dismal picture of Americans who are just not preparing themselves for the inevitable facts of aging.

The statistics aren’t encouraging. About three quarters of Americans are likely to need long-term care, but very few are ready for the costs.

Bigstock-Beautiful-woman-looking-throug-20311445A recent article from Think Advisor paints a dismal picture of Americans who are just not preparing themselves for the inevitable facts of aging. The article, “Now You Can Add Long-Term Care to Death and Taxes,” says this may be one of the biggest disconnects in the USA: the gap between how many Americans will need long-term care versus what people actually think they’ll need.

Just 46% think they’ll need it, according to a new study that surveyed 2,000 people to see how prepared Americans were for the realities of long-term care.

Another misconception is the out-of-pocket cost of long-term care. The study found that the actual out-of-pocket cost of long-term care is more than $47,000.  However, many Americans think it’s about half that, $25,350.

In addition, $47,000 is the low end of the scale for the yearly cost per stay. While some assisted living costs may be $45,000, semi-private nursing homes are closer to $85,000. Private nursing home care is $97,455, according to the study, which was conducted by Digital Third Coast. The study was made up of 57.7% males and 42.3% females, while 56% were age 35 and younger, 33% were 36 to 55 years old and 11% were 56 and older.

Can you believe that 64% have nothing saved for long-term care, and 67% can’t contribute to a parent’s long-term care? The study found that Americans intend to save about $657 per month for long-term care.

Another issue between reality and perception, is the age that people think they’ll be when they need any sort of long-term care. Most study participants say it’s 79 years old.  However, it’s actually 73 years old, according to the study. Women will require long-term care on average for 3.7 years, and men will need it for about 2.2 years.

People in our country also have worries about putting relatives in long-term care, the study found. For example, 73% are concerned about physical/sexual mental abuse. About 41% said the cost was more than anticipated, and 48% hadn’t expected to put loved ones in long-term care. Only 33% actually have had discussions with family about when care is necessary.

One thing we do know is what we want when it comes to long-term care. We want quality of care, but we also want low costs, and we want facilities that are not too far from family members.

We just don’t want to think about how that’s going to be paid for.

Reference: Think Advisor (August 6, 2018)“Now You Can Add Long-Term Care to Death and Taxes”

Blueprint for Senior Singles

Not having a built-in support system of a spouse, children, in-laws, etc., can lead to challenges for singles as they age.

Singles need to be more proactive about planning for long-term care and estate planning to protect themselves against some of the inevitable issues of aging.

MP900438735Not having a built-in support system of a spouse, children, in-laws, etc., can lead to challenges for singles as they age. About 35.4 million Americans lived alone in 2016, making up almost a third of all households, according to the U.S. Census Bureau, and about 20 million of them are 65 or older. For these aging singles, planning is key to being prepared for financial security and health issues, as reported by CNBCin “For aging singles, here's how to plan for your golden years,”

Saving as much as possible in a 401(k) plan or IRA while you can are important. You should also make certain that you have emergency savings, if you're still working. If you’re still employed, find out if your company offers group insurance for long-term disability. Those policies provide a portion of your income, in case you end up unable to work due to an accident or other medical condition.

There are other ways for singles to protect themselves, as they age.

In addition to an estate plan with a will, select someone to handle your finances, if you reach a point where you can’t. When you give someone durable power of attorney for your finances, he or she will be  responsible for paying your bills with your money.  It is, therefore, important to choose someone you trust.  You should also grant someone durable power of attorney for health care. That lets the individual make important health-care decisions, if you can’t. That is different from a living will. That document states your wishes, if you’re on life support or suffer from a terminal condition. This helps instruct your proxy’s decision-making. If you have no one named, your healthcare providers must follow your wishes in that document.

If you’re single and don’t have family close by who can assist, if you need help with daily living activities, you'll need to plan for how to pay for it. A person turning age 65 today has nearly a 70% chance of needing such long-term care in their remaining years, according to the Department of Health and Human Services. On average, women need care longer (3.7 years) than men (2.2 years).

You also need to understand that Medicare (which you generally sign up for when you’re 65) doesn’t pay for long-term care. It can be expensive. If you have no family to rely on, and you don’t want to spend down your assets, but you’re above the income threshold to qualify for Medicaid, long-term care insurance can be an option. LTC insurance will pay a daily amount, up to a predetermined dollar limit and length of time, for services. Policies can be expensive, costing up to $2,000 a year for younger applicants (in their 50s) and double that for those over age 65. As with all age and health related insurance, the younger you are when you look into it, the better.

Here's a critical point: if you have a medical emergency and you live alone, you could be at risk. There are many different ways to solve this problem, among them, a medical alert system or a tag team of peers who check on each other daily.

Reference: CNBC (July 2, 2018) “For aging singles, here's how to plan for your golden years”

Will Your Adult Children Be Impacted by Your Retirement?

An important discussion between parents and children is how you want to live.

If your children depend on you financially or they’ve come to count on you as a regular babysitter, you’ll all need to address what comes after you retire.

25543329453_9991c191f2_oSeniors who have been looking forward to moving to a less expensive area, living in an RV as long as their health permits or downsizing in every possible way, may need to consider others in their lives who will be affected by these changes.

US News & World Report’s recent article, “The Talk to Have With Your Kids Before You Retire,”acknowledges that this can be uncomfortable for some parents.  However, parents need to prepare adult children for their impending retirement. It’s crucial to begin financial discussions early in retirement. That makes it easier in later years, when cognitive decline can affect decision-making. Talk with your children about these things regarding your retirement:

Notice. Your retirement may affect your children, especially if you plan to move or are assisting them financially. Let them know of your retirement plan five years prior to leaving the workforce, and remind them about it every now and then.

Financial info.Some parents don’t want their kids to know the details of their finances, while others share information and even involve them in the process. If you’re more open and honest with your kids about your financial information, they’ll feel secure that their parents are OK. If you are struggling, you should also let them know that.

Financial support. You may need to stop supporting your kids so that you can retire. If you have a kid living with you in the house and you’re helping to pay their bills, start working on a strategy to get them off your payroll and out of the house.

Estate plan.Talking to your children about your estate planning to avoid confusion and sibling rivalry during a very stressful time. Talk about which child will be executor, so there are no surprises.

New lifestyle.An important discussion between parents and children is how you want to live. This includes location, which might change with the seasons, deciding if you want to live close to children and grandchildren, or prefer a spot with opportunities to enjoy retirement. You should also let your kids know your preferences for an assisted living facility or a nursing home, and discuss paying for long-term care.

Share important contact information.Give your children a list of your legal and financial team members: estate planning attorney, CPA, financial advisor, banker and any other professional who they would need to be in touch with, if something happened to you. If someone other than your children is your executor or successor trustee, that person should have the same information.

Reference: US News & World Report (June 8, 2018) “The Talk to Have With Your Kids Before You Retire”

New Study Shows Caregivers Use Their Own Savings to Help Elderly Loved Ones

New findings reveal 7 in 10 caregivers reduced their own living expenses to cover caregiving costs.

“New findings reveal 7 in 10 caregivers reduced their own living expenses to cover caregiving costs.”

MP900404926Americans are feeling more of a pinch in their finances and lifestyle, because of the need to care for an elderly relative or friend, according to a Northwestern Mutual study.

Think Advisor’sarticle, “Americans Are Spending More but Planning Less for Caregiving: Northwestern Mutual,”says the study found that Gen X and Millennials are the heart of the sandwich generation and are struggling with the competing pressures of caring for aging family members and their own children. At the same time, they are trying to create financial security and maintain a lifestyle.

The 2018 Northwestern Mutual C.A.R.E. (Costs, Accountabilities, Realities, Expectations) Study gathered the responses from more than a thousand American adults from the general population, with an oversample of 233 American adults age 35 to 49 (for a total of 413) and an oversample of 709 experienced caregivers (for a total of 987).

The study found that 30% of the respondents identify as current or past caregivers and 22% expect to become caregivers in the future.  However, even though half of American caregivers say the care event was planned, many are still not prepared for the financial obligations, which seem to be increasing each year.

The survey found that 70% of caregivers provide financial support. In addition, 34% of current caregivers spend between 21% and 100% of their monthly budgets on caregiving-related expenses. Of those expenses, on average, $273 is spent on medicine/medical supplies and $159 on food, the survey found.

To cover caregiving costs, roughly 66% of experienced caregivers said they decreased their living expenses (significantly higher than the 51% who said so last year), according to the survey. However, the survey also found that people who believe they will provide care in the future, aren’t getting ready. About 57% of future caregivers anticipate incurring personal costs as a function of providing care. A total of 48% have not planned at all—a big increase from 35% last year.

“While financial expectations for caregivers continue to grow, unfortunately planning is taking a backseat,” Williams-Kemp said in a statement. “In an environment of rising costs and fluctuating economic and health care realities, winging it isn’t an option. Being proactive before a long-term event happens can help ensure that you can still take care of your own needs, while caring for someone else’s well-being.”

Americans also aren’t planning for their own long-term care events. The study found that 75% of those surveyed said they haven’t planned for their own long-term care needs. Of those who did take steps to prepare, 52% included provisions in their financial plan, 42% purchased a long-term care product and 35% increased their savings.

 The study also revealed that while many Americans expect that their partner or children will be the ones to take care of them if and when they need help, more than two thirds have never actually discussed this with their family members. It’s not an easy subject to broach, but one that should be part of a larger conversation about aging and expectations.

Reference: Think Advisor (March 15, 2018) “Americans Are Spending More but Planning Less for Caregiving: Northwestern Mutual”

Finding the Right Assisted Living Facility for Now and the Future

People moving into an assisted living facility should do a lot of research to make sure they get the quality care and the services they need.

People moving into an assisted living facility should do a lot of research to make sure they get the quality care and the services they need. Their lives may depend on it.

MP900407501Life in an assisted living facility is a welcome alternative to aging seniors who are no longer able to remain in their own homes, but don’t want or need to live in a nursing home, which often feels like living in a hospital. They can receive the services they need, while enjoying a full roster of activities and the companionship of their peers. It sounds like a good plan, and in many cases, it is.

However,Consumer Reports’recent article, “5 Steps for Choosing the Right Assisted Living Community”says that finding the right residence can be a huge challenge.

Right off the bat, the cost is high. In 2017, the median fee for a private one-bedroom was $45,000 a year, according to Genworth, a long-term care insurer. Most residents pay out of pocket, although some qualify for Medicaid. Medicare generally does not cover long-term care services.

In addition, shortfalls in caregiving can be a problem for assisted living residents. A 2017 survey of state long-term-care ombudsmen conducted for Consumer Reports, which monitors senior living facilities nationwide, found the most common complaints dealt with understaffing and delays in response to calls for assistance. Ombudsman data show that complaints about assisted living have gone up 10% in recent years.

For families looking at into assisted living facilities for a family member, there are ways to find a facility that delivers quality care in a comfortable setting. The key is to conduct thorough research. You should egin by asking these five key questions:

  1. What Kind of Care is Required?Remember that different facilities offer varying levels of care. Is there a registered nurse on staff? Without this basic level of care, your loved one might end up going to the ER more often.
  2. What is the Quality of Care?Look at the residence’s licensing and inspection records, to see if there are any issues. To get a feel for the way things work, make several visits to the facility. Go for meals and during the weekends, when fewer staff are on duty. You should also talk to residents and their families about their experiences.
  3. Uncover the Real Costs of the Care. Get a written list of fees and charges from the residence and be sure that they’re included in the contract. It is recommended that you hire an elder law attorney, who’s familiar with local facilities, to review the terms of the contract.
  4. Can Your Parent or Family Member Age in Place? Find out what scenarios might trigger a discharge, and whether you could hire private aides, if more care is required. You should also ask what assistance the facility would be able to provide, if a move is needed.
  5. Is an Advocate Available? If family and friends are not able to visit on a frequent basis, the potential for problems increases. Care issues, from cleanliness to patient treatment, may not be readily apparent to an elderly resident, especially if they are suffering from dementia. Consider hiring an aging life-care expert or social worker to make frequent visits, if you are unable to. If the facility’s management knows someone is keeping a watchful eye, the quality of care will be better.

Reference: Consumer Reports (April 16, 2018) “5 Steps for Choosing the Right Assisted Living Community”

Diagnosis for Early Onset Alzheimer Not an Easy Matter

For younger patients, early-onset Alzheimer’s symptoms are usually disregarded or blamed on fatigue, depression or stress.

Bigstock-Beautiful-woman-looking-throug-20311445It often takes a very long time before a young person having problems with memory loss or confusion is diagnosed with Alzheimer’s disease. The Concord Monitor reports, in “Stolen Memories: Problems with diagnosis of younger-onset Alzheimer’s,the delay in diagnosis can lead to problems with work and health insurance coverage.

One-third of the people with younger-onset Alzheimer’s, who responded to a 2006 survey by the Alzheimer’s Association said it took them somewhere between one to six years to receive an accurate diagnosis of Alzheimer’s. Subsequent studies by the Alzheimer’s Association have estimated that as many as 50% of people of all ages with the disease neverreceive a diagnosis.

Unfortunately, there is no easy blood test that can be used to detect the brain disease. Diagnoses are usually confirmed through a combination of neuropsychological exams, analyses of a patient’s family history and costly spinal taps, MRIs, PET and CAT scans to view plaques and tangles in the brain.

Meanwhile, because of this delay, younger people can have issues at work because of the symptoms.

“Families will come in to meet with me and I’ll say, ‘Are you still working?’ and they’ll say, ‘No, I got laid off,’ or, ‘I took an early retirement, because I wasn’t sure what was going on,’ and lo and behold they realized later they had Alzheimer’s,” said Melissa Grenier, manager of the New Hampshire Alzheimer’s Association.

Because of the time it takes to get an accurate diagnosis, patients with early dementia frequently are fired or move from job to job. Most patients displaying symptoms are not aware of it at the time.  As a result, it can be discouraging and frustrating.

If a person had a heart condition, they would be aware of the illness and would be able to work with their employer to ensure that they continued to have a job and health insurance coverage and/or disability insurance coverage.  However, if they are fired or stop working before receiving an Alzheimer’s diagnosis, they will lose the financial safety net. Treating a condition like Alzheimer’s costs hundreds of thousands of dollars.

The person with Alzheimer’s is usually the last to know that there are issues. Those patients who are aware of changes in behavior, can be reluctant to speak with their employer. They fear that they could lose their positions.

Families facing early-onset Alzheimer’s should speak with an elder lawyer. This is not an easy situation, and professional help will be needed.

Reference: Concord Monitor(April 8, 2018) “Stolen Memories: Problems with diagnosis of younger-onset Alzheimer’s”

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