Planning for your Elder Years

July 25, 2011 § Leave a comment

If we were to ask an older person what his or her most important concerns for aging are, we would probably get a variety of different answers.  According to surveys frequently conducted among the elderly, the most likely answers we would receive would include the following three principal concerns or life wishes:

1.  Remaining independent in the home without intervention from others;

2.  Maintaining good health and receiving adequate health care;

3.  Having enough money for everyday needs and not outliving assets and income.

To address these concerns or wishes and maintain the quality of life wanted in the elder years, it simply takes a little preplanning.  Few people do this preplanning.

It is human nature not to worry about an event until it happens.  We may prepare financially for unexpected financial disasters by covering our homes, automobiles, and health with insurance policies.  However, no other life event can be as devastating to an elderly person’s lifestyle, finances and security as needing long term care.  It drastically alters or completely eliminates the three principal lifestyle wishes listed above.  The majority of the American public does not plan for this crisis of needing eldercare.  The lack of planning also has an adverse effect on the older person’s family, with sacrifices made in time, money, and family lifestyles.

Because of changing demographics and potential changes in government funding, the current generation needs to plan for long term care before the elder years are upon them.  Let’s look at some facts:

*the population of the “very old,” — older than age 85 — is the fastest growing group in America.  This population is at highest risk for needing care.

*Medical science is preventing early sudden deaths, which means living longer with impaired health and greater risk of needing long term care.

*The Alzheimer’s Association estimates the risk of Alzheimer’s or dementia beyond age 85 to be about 46% of that population.

*It is estimated that 6 out of 10 people will need long term care some time during their lifetime.

*Children are moving far away from parents or parents move away during retirement making long distance care-giving difficult or impossible.

*Government programs — already stretched thin for long term care services — will experience even greater stress on available funds in the future.

One of the important things for planning is how to maintain your lifestyle as you age.  You may be healthy enough to stay in your own home with help provided for the following activities of daily living:

  • maintaining a home
  • providing meals
  • supervision
  • companionship
  • transportation
  • shopping services
This type of care at home is non-medical and is generally provided free of charge by family, friends, or volunteers, or the care must be paid for out-of-pocket by the family.  Government programs, in most cases, will not pay for this kind of care.  It is estimated that 80% of all long term care is non-medical, with 90% of that care provided in the home.  It is most likely that your long term care will begin with home care.
It is wise to plan now how you will pay for care when it is needed.  In evaluating your future income, you may find it necessary to add some resources such as long term care insurance to pay for assisted living or nursing home costs.  Long term care insurance must be purchased while you are younger and healthy.  Failing health, stroke or other aging issues will not allow you to qualify for this insurance.
A reverse mortgage may also help you pay for home care if staying in your home is an option.
Consider where you may want to live in your elder years.  Many assisted living facilities offer complete care alternatives with a nursing home wing if needed.  Senior retirement communities also offer many amenities with some including home care options.
Now is also the time to do estate planning.  An elder law attorney will give you direction on how best to protect your assets for future needs and for Medicaid planning.  Now is the time to have your elder law attorney create your trusts, will, medical directives, and any other documents you want noted for future use.  Gather insurance policies and bank records where they can be found by family members in case you are not able to get them yourself.
We don’t like to think of our elder years in terms of health problems, but a sudden stroke, heart failure or onset of dementia could make it impossible to carry out our own wishes if preparation is not made ahead of time.
The process of long term care planning involves the following four principles:
  1. Knowledge and preparation are the keys to success;
  2. Having funds to pay for care expands the choices for care settings and providers;
  3. Using professional help relieves stress, reduces conflict, and saves time and money;
  4. Success is assured through a written plan accepted by all parties involved.
Consultation with an elder law attorney will help you institute these principles within a sound long term care plan.
Every Day of Every Week, Weekly Law is there for you.
For more information, please give us a call at 815-570-2334.

Misconceptions About Who Pays for Long Term Care

July 21, 2011 § Leave a comment

A large majority of the American public still believes that the government will provide long term care when needed through Medicare.  It is this misconception that most likely prevents people from doing any planning at a younger age for the future need for care.  Contrary to popular belief, once a person requires long term care, as opposed to rehabilitative care from which they will heal and eventually return home, Medicare will not pay for long term care beyond 100 days of in-facility care, only the first 20 of which are covered 100%.

According to the National Care Planning Council (www.longtermcarelink.net) many people believe they can give away assets prior to the need for long term care and qualify for Medicaid.  The Council suggests that this belief prevents people from considering other ways to fund the cost of future care.  In fact, the earlier one starts planning, the more options are available to help protect hard-earned assets from total depletion, and a person’s total impoverishment before government benefits covers their cost of care.

The major governmental program that pays for a person’s long term care costs, once they are impoverished, is Medicaid.  However, Medicaid’s historical bias of paying only for nursing home care, has prevented most people from properly planning for their future long term care needs.  The good news is that Medicaid now covers Assisted Living care, and with the Health Care Reform Act, is shifting its emphasis to paying for more in-home care.  Now it is more important than ever to proactively plan for possible long term care costs by consulting an elder law attorney about the rule and regulations of Medicaid and the best strategies to help you legally retain as many assets as you can.  In addition to helping you protect your assets, proper planning also allows you to have a choice in care setting and in the types of services you receive.

Next week, I’ll talk about how preplanning can help you address these issues.

Little-known Government Program Pays the cost of Elder Care

July 13, 2011 § Leave a comment

WHAT IF 33% OF ALL SENIORS IN THIS COUNTRY could receive up to $1,949 a month in additional income from the government to help cover their elder care costs? THEY CAN!

Under the right circumstances, a little-known federal program will pay additional income to cover long term care costs for at least 1/3 of all US senior households — that’s how many war veterans or their surviving spouses there are in this country. But the provisions of this program are such a well-kept secret that only 4.7% of US seniors are actually receiving the benefit. The great news about this program is the Department of Veterans Affairs will pay you to hire your family, friends or just about anyone to take care of you (Caregiving spouses can’t be paid under this program). The program is called “Veterans Pension.”

Most people who have heard about Pension know that it will cover the costs of assisted living and, in some cases, cover nursing home costs as well. But the majority of those receiving long term care in this country are in their homes. Estimates are that approximately 70% to 80% of all long term care is being provided in the home. All of the information available about Pension overlooks the fact that this benefit can also be used to pay for home care.

It also comes as a surprise to most people that the Department of Veterans Affairs will allow veterans’ households to include the annual cost of paying any person such as family members, friends or hired help for care when calculating the Pension benefit. This annual cost is deducted from household income and used to calculate a lower “countable income,” which, in turn, enables families to receive this disability income from VA. Even though VA claims the benefit is for low-income families, because of the special provision in the regulations — allowing for deduction for care costs — households earning between $3,000 to $6,000 a month or more can still qualify for Pension under the right conditions.

This extra income can be a welcome benefit for families struggling to provide eldercare for loved ones at home. Under the right circumstances, this annualized medical expense for the cost of family members, friends or any other person providing care, could create an additional household income of up to $1,056 a month for a single surviving spouse of a veteran, up to $1,644 a month for a single veteran or up to $1,949 a month for a couple.

If the disabled care recipient has been rated “housebound” or in need of “aid and attendance” by VA, all fees paid to an in-home attendant will be allowed as long as the attendant provides some medical or nursing services for the disabled person. The attendant does not have to be a licensed health professional. There is also no need to distinguish between medical and nonmedical services — all are deductible.

For a disabled person who has been rated “in need of aid and attendance” or “housebound”, a family member will be considered an in-home attendant, but that family member has to be paid for services duly rendered. There is potential for fraud here where a family member may move into the home and ostensibly receive payment as a caregiver but not actually provide the level of care paid for. Documentation for this care must be provided to VA, and it is reasonable for VA to question whether the services being purchased from a family member living in the household are legitimate. Such arrangements should be extensively documented and completely arm’s-length.

The care arrangements and payment for home care must be made prior to application and there must be evidence that this care is needed on an ongoing and regular basis. We recommend a formal care contract and weekly invoice billing for services. Money must exchange hands and federal law requires employment taxes must be withheld and there must be evidence of this. All of this documentation must be provided as proof to VA when making application for the pension benefit. Costs for these services must be unreimbursed; meaning these costs are not paid by insurance, by contributions from the family or from other sources. VA will allow, however, family caregivers being paid by their loved ones, to turn around and pay the household bills for their loved ones to help defray the cost of the care.

Due to the need for a rating, documentation for annualizing care costs and the extensive proof needed to show the caregiver is indeed an employee of the care recipient, most people should not try this on their own. An expert in this area should be sought to help with the application in order to avoid lengthy delays in awarding a benefit or a possible denial of benefits. I am an accredited attorney with the VA and have been helping families qualify for VA benefits for over four years.

To learn more, please call our office to schedule an appointment at 815-570-2334.

Every Day of Every Week, Weekly Law is there for you.

Weekly Law Blog arrives!

July 13, 2011 § Leave a comment

  Welcome to my new blog.  I’ll have new entries and updates with information of interest on various aspects of elder law and life care planning that I’ll post here every week.  As always, for more information on our services, give us a call at 815-570-2334.  Thanks and happy reading!

Dawn

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