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How to Avoid Losing Massive Amounts of Money to a Nursing Home

Thursday, August 18, 2011

 

You’ve heard of a Power of Attorney . . . a Will . . . perhaps a Revocable Living Trust.  These instruments all serve a purpose, but cannot accomplish asset protection.  In other words, neither a Power of Attorney, nor a Will or Revocable Living Trust can shield your hard earned money from your creditors, including future long-term care creditors.  The average cost of a private nursing home room in the DC Metro area is around $100,000 per year. 

Powers of attorney help avoid a dreaded process known as “living probate,” but will not protect assets from creditors.  In other words, documents that plan for your incapacity are useful should the unthinkable occur, but they won’t do a thing to protect your estate. 

A Will serves the purpose of aiding the probate process after death and allows you to select who takes what from your estate when you are gone, but if there is no money left in your estate after you have passed and after your creditors have had their turn, there may be nothing left at all for your intended beneficiaries. 

A Revocable Living Trust is better than a regular Will because it allows your estate to avoid probate, minimizes delays, and maintains your privacy.  But since we are talking about a revocable trust, you have no ability to protect that money from your creditors; after all, you have full control over the assets, and so your creditors can reach them too.

Is there some way to actually protect assets in contemplation of future long-term care expenses?  Yes.  You can protect your assets legally and effectively with a Living Trust Plus also known as an irrevocable income-only trust.  You can legally qualify for Medicaid – the government program that pays for long-term care – even if you are not impoverished.  But to do so, you need the requisite documents in place. If you are around the age of 65 or are already helping a loved one pay for long-term care, you owe it to yourself and your family to attend a free seminar on the Living Trust Plus.

How to Select the Best Nursing Home

Wednesday, August 17, 2011

“Where do I begin?”

Don’t be alarmed. This is often the first question a person has when faced with the overwhelming task of selecting a nursing home or assisted living facility. The steps provided below offer a starting point.

Step 1 – Have a Conversation:

Openly express the needs and desires that an ideal facility would provide.  Keep in mind important variables such as location of the facility, whether a special care unit is needed by the resident, and what types of payment sources are accepted. You can help by making a list of your loved one’s medical, psychological, spiritual, and social needs, as well as his or her preferences and usual routine.

Step 2 – Identify the Facilities & Ask Questions:

A short phone call is generally all that is required to obtain information packets from nursing home facilities. Some facilities may be willing to mail you activity calendars and schedules. This allows the family to understand the atmosphere and recreational benefits offered to residents. The internet is also a means to contact and request information from a facility.

Step 3 – Tour the Facilities:  

Don’t schedule your visits in advance. You should be able to meet with an administrative staff member who should be able to answer all your questions. Tour a second time, in the evening or on the weekend, to see if there is a drastic difference in the atmosphere or quality of care. It is important to tour at least two facilities so you can see first-hand the differences in physical environments and the staff. 

Step 4 – Observe and Ask Questions:

You can learn a lot just by watching and paying attention. You want to be sure that the facility is giving proactive care, not just reacting to crisis. Reflect upon your tour by asking yourself questions. Here is a sample checklist to get you started:

1. Do I feel welcome?

2. How long did I have to wait to meet with someone?

3. Did the admissions director ask about my family member’s wants and needs?

4. Is the facility clean?  

5. Are there any strong odors?

6. Is the staff friendly?

7. Do they seem to generally care for the residents?

8. Does the staff seem to get along with each other?

 

5 Ways to Ease the Burden When Caring for Kids and Aging Parents

Tuesday, August 16, 2011

Did you know last month was National Sandwich Generation Month? You may have never heard of it before, but if you care for aging parents and young children, you are part of this rapidly growing demographic.  The burden of shouldering so much responsibility can be overwhelming.   

Common struggles include having to pay for mom or dad’s long-term care, shielding mom or dad’s assets from nursing home facilities and cleaning up a financial or legal mess in the absence of proper planning. If you are facing these same struggles right now, there are a number of planning steps you can take to ease the legal and financial pain. Here are 5 suggestions to ease the transition, both for you and your parents:

1. Don’t Wait. 

Find out what type of estate planning documents your parents have in place (i.e. will, trust, power of attorney) while there is still time to update them. If their medical directives were created pre-HIPPA, they should be reviewed immediately by an attorney. 

2. Sit Down With Parents Every 2-3 Years to Review their Estate Plan.

Make sure their wishes are the same and that they still approve of the people they chose to make important end-of-life decisions on their behalf.  Make sure your parents have an Advance Medical Directive so they may communicate desires to physicians and family members regarding all forms of medical treatment, including preferences as life support, organ donation, funeral arrangements, and disposition of remains.  There has been some concern among attorneys as to whether the public will understand the need to properly plan a will or trust in light of these large exemptions.  On the contrary, the new tax laws that are in-flux should, if anything, prompt families to seek an updated assessment of their existing will or trust documents. 

3. Consider a Trust.  Not a Will.

Consider placing all of mom or dad’s assets into the right kind of trust so they stay protected and out of the equation if your parents ever need to apply for Medicaid benefits or go into a nursing home.  A Certified Elder Law Attorney can help with this and save your family substantial sums of money.  Medicaid is not just for the “poor,” but is a government program meant to pay for the long-term care needs of Middle Class Americans, too.  

4. Locate Existing Documents Immediately

If your parents expect you to fulfill a particular role or carry out an important task upon their death, the documents giving you these rights should be stored somewhere safe. Taking these steps will help ease the pressure of being “Sandwiched” between caring for young children and aging parents. They will also help to ensure that mom or dad’s assets stay protected and that you are in the best position to honor their wishes during the later stages of life. 

5. Consider Mediation. 

Have the tough conversations with mom or dad about their wishes now while they are still active and in good health. Find out what type of long-term care they want (or don’t want) and be sure to document their wishes accordingly.

Sometimes the consequence of dealing with the final years of elderly parents can break families apart and create long-lasting animosity.  Suspicions or distrust often lead to anger and the anger often leads to severing the channels of communication between family members. This can occur between parent and child or between siblings or between all of them.

Mediation allows parents to focus on their abilities rather than their limitations; allows children to come up with and consider options not thought of previously; encourages uninvolved family members to become involved; and allows parents to express wishes and desires that had previously gone unuttered.

Members of the Sandwich Generation have a lot on their plate (no pun intended).  But with proper planning you can give your family and your parents the peace of mind they deserve.

Image: photostock / FreeDigitalPhotos.net



 

3 Critical Factors to Consider When Selecting a Nursing Home

Monday, August 15, 2011

AARP reports that 70% of men and women who have reached age 65 will go on to live in a long-term care facility at some point. Before you or a loved one needs to enter a long-term care facility, proper planning is a must.

What is Medicare? Medicare is the federal public health insurance program for Americans age 65 and older. To be eligible, you must have contributed to the Medicare system. Is Medicare something to hang your hat on? No. A common misconception is that Medicare can be used to pay for long-term care. The reality is, for all intents and purposes, it can not. Medicare only pays a maximum of 100 days of nursing home care!

What is Medicaid?
Medicaid is controlled at the state level, unlike Medicare. Medicaid rules vary state-to-state, but generally speaking, people can obtain long-term care and have it paid for by Medicaid. To be eligible, however, planning in advance is usually required. You don’t have to be disadvantaged, fiscally speaking, to qualify for Medicaid

What is the Real Difference? Medicare is really just a form of health insurance. It isn’t necessarily friendly to the men and women who need long-term care. On the other hand, Medicaid is designed to provide long-term care coverage.

While Medicaid is the optimal program for long-term care, Medicaid may still not pay for all of your expenses.  As mentioned before; with proper planning, it is possible to qualify for Medicaid even if not “poor.” More importantly, it is completely possible to build your plan so that you DO receive the items that Medicaid does not cover (for example, hearing aids.) The easiest way to implement a plan that will grant you the peace of mind for long-term care is to speak with a Certified Elder Law attorney. Your Elder Law attorney should make your quality of life the priority when assisting you with your LifeCare and Medicaid Asset Protection Plan.  

3 Critical Factors to Consider When Selecting Your Nursing Home

Tip 1 – Have a Conversation:

Openly express the needs and desires that an ideal facility would provide.  Keep in mind important variables such as location of the facility, whether a special care unit is needed by the resident, and what types of payment sources are accepted. You can help by making a list of your loved one’s medical, psychological, spiritual, and social needs, as well as his or her preferences and usual routine.

Tip 2 – Identify the Facilities & Ask Questions:

A short phone call is generally all that is required to obtain information packets from nursing home facilities. Some facilities may be willing to mail you activity calendars and schedules. This allows the family to understand the atmosphere and recreational benefits offered to residents. The internet is also a means to contact and request information from a facility.

Tip 3 – Tour the Facilities: 

Don’t schedule your visits in advance. You should be able to meet with an administrative staff member who should be able to answer all your questions. Tour a second time, in the evening or on the weekend, to see if there is a drastic difference in the atmosphere or quality of care. It is important to tour at least two facilities so you can see first-hand the differences in physical environments and the staff. 

Image: FreeDigitalPhotos.net

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