Capital District - NY Estate & Elder Law

Long-Term Care? The Discussion Should Not Be Avoided

 The older one gets, the more expensive the insurance becomes and that is, if it is still available.

The possibility of needing long-term care can be a thought that one would like to avoid. However, the truth is it should be discussed and taken into consideration in retirement planning, according to CNBC in “Plan ahead to protect your family and your fortune from this retirement risk.”

Consider this: in 2018, the national median annual cost of a semiprivate room in a nursing home was $85,775. A home health aide in 2017 cost $49,192. That’s not small change.

So how do you prepare for long-term care costs?

Start planning now. The earlier in your life that you purchase a long-term care insurance policy, the more likely you’ll be able to afford to buy one. As you get older, they get more expensive—if you can even purchase them at all.

Where would you want to receive care? If you have a choice, would you rather have someone come to the house for a few hours to help, or would you prefer to move to an assisted living facility? Both have costs.  However, figuring out which one you’d prefer (if you have a choice), will help in the planning process.

You can now purchase more than just the traditional long-term care program. There’s also a hybrid cash-value life insurance policy or you can self-insure, if you have the cash on hand.

Who will be making your medical decisions? Have your estate planning attorney put a healthcare directive in place—designating a trusted person who will make decisions about your medical care if you should become unable to do so.

Who will make your financial decisions? Your estate planning attorney will most likely also create a power of attorney for you. This must be someone who you trust, someone good with handling money and making decisions and who can take over paying bills and managing your household budget, if you can’t.

Both these people may never be called upon to act—but if they are, you and your family will be in much better shape. Make sure to discuss your choices for health care and finances with these individuals.

In some cases, particularly when it comes to the financial power of attorney, a bank or a professional advisor may be a good choice. They have certain reporting requirements and may be a less emotional choice than a family member.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.

Reference: CNBC (Aug. 22, 2018) “Plan ahead to protect your family and your fortune from this retirement risk”

 

Have Young Children? Estate Plan Is a Priority

 

 

 

Many young families with small children do not have estate planning at the top of their list. However, it really should be a top priority, according to The Daily Sentinel’s in “What is missing from your estate plan?”

Some information in estate planning that should be known is a last will and testament. It is the document which parents need to legally nominate guardians to rear their children, if orphaned. While some people name one person to rear the children and handle the money, it’s a good idea to separate the two roles.

Without these instructions in a will, those left behind can have very different ideas about where the children should live and who should care for them. If the two parent’s families have very strong opinions, suddenly both families have hard choices to make about what will happen to the children.

No parent wants to leave a legacy of court battles and family division.  However, that’s what is likely to happen without a will.

There are other issues that estate plans address while you are alive.  It is also necessary to plan for incapacity. A living will, also known as an “advance directive,” is important because it helps pre-answer questions, regarding what treatment and care you would want if unable to speak for yourself. Do you want to be kept alive by artificial means? You do not want your loved ones making this decision during a time of great emotional stress, so this is an important document to have in your estate plan.

Finally, your estate plan should include a medical durable power of attorney to deal with all other medical decisions other than end of life. Without it, if you are not near death but not able to share your opinions about your care, your family and your medical providers are placed in a difficult position. In contrast, those who care enough about their family designate an agent and ensure that their wishes are made legally binding.

The big question everyone must face is “When should I start working on my estate plan?” If the answer is “Later,” then the real answer is “No time soon.” For young parents, that puts your minor children in a bad position, where a court may make the decision about who will rear them and how their lives will go on after you are gone.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances, including families with young children.

Resource: The Daily Sentinel (Aug. 12, 2018) “What is missing from your estate plan?”

 

 

There are Many Reasons and Uses for an Estate Plan

 

Why should you have an estate plan? There are many reasons and many goals, including providing for your spouse and children, as well as dealing with a family business, minimizing tax liabilities and naming the people you want to act on your behalf when you’re gone, according to the Brainerd Dispatch in “Wealth Column: Estate Planning Basics,”

So, what do you need? First, you’ll need a will, which is the basic tool for estate planning. It prevents two very expensive and stressful issues: managing your wishes for your estate and possibly losing hefty sums through unnecessary taxes.  However, that’s just the start.

You may also need trusts, depending on your family’s situation. You’ll want to have life insurance policies with beneficiaries. Life insurance proceeds are not governed by the will, so your heirs will receive any funds directly. Benefits from retirement funds fall into this same category. That’s why making sure that your beneficiary designations are up-to-date, is so important.

Working with a team of trusted advisors, is productive for most people. Remember that your estate plan touches on taxes and investments as well as your will, power of attorney and medical directive. Consider these steps to get your entire estate plan in order:

• Gather personal data about yourself and your family,
• Create a balance sheet of your assets and liabilities,
• Review your will and any existing trusts,
• Evaluate all estate tax options, such as the best method of disposing of your share of community property—considering the unlimited marital deduction and the use of tax-sheltered trusts,
• Consider the optimal way to distribute your retirement plan benefits,
• Calculate potential estate, gift and income tax liabilities,
• Determine the availability of liquid assets to meet potential estate expenses and taxes.

An estate planning attorney can work with the information you have gathered to create an estate plan that fits your unique circumstances.

Resource: Brainerd Dispatch (Aug. 3, 2018) “Wealth Column: Estate Planning Basics”

 

 

Multigenerational Living on the Increase

 

There are a record number of multigenerational homes in the U.S. and that trend is expected to keep rising, according to a Pew Research Center analysis reported in Financial Advisor Magazine in “How to Address Multigenerational Estate Planning Issues.”  

For some families, it’s college students moving back with mom and dad while they pay off student loans or newly married couples living with one set of parents while they save money to purchase a home of their own. New parents are recruiting their own parents to combine households, so child care and a stronger sense of family is created. In other families, having elderly parents move into their children’s home helps the seniors with aging issues.

In many instances, families add separate living quarters to their existing homes. States are addressing zoning issues that prohibited this kind of construction in the past. 

Pressures created by rising housing costs, housing shortages and demographics have all contributed to this new trend. How to navigate this kind of family “merger” requires a lot of planning, including estate planning. How will the property pass to the next generation? What about siblings who are not involved in the shared housing space?  How should their portion of the inheritance be handled?

There are many ways to navigate the closer relationship with aging parents or childcare needs. Some elect to purchase a nearby condo where parents are living, so at some point the parents can move from their single-family home to an apartment. For others, the parents move to an apartment within the home, so their children and grandchildren can enjoy the larger living space. 

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and may include a multigenerational home.

Resource: Financial Advisor Magazine (July 31, 2018) “How to Address Multigenerational Estate Planning Issues”

 

 

Family Meetings Can Be Helpful and Productive

 

 

An elder member of the family sometimes needs caregiving. If it is a family project, it can be easier, according to aPlaceforMom.com  in “Guide to Elder Care Planning & Family Meetings.” That effort will take a family meeting, as well as including paid caregivers in the planning process.

Sharing information and airing different ideas can be productive. One family member might feel like they are carrying the whole load, while others feel like they want to do more but aren’t sure what. It’s typical for siblings or others to feel like they are doing more than their share: talk it out, so everyone is taking some part of the responsibility.

These roles are often influenced by culture or gender. Caring for a frail older person is not easy.  However, the same strong person who could easily mow mom’s lawn, will be uncomfortable helping with bathing and toileting.

At least three and at most 10 people should be invited to the meeting. We have some cultural taboos, such as discussing death and dying in front of a person.  However, respecting their desire to be part of that conversation is very important. If they don’t want to be involved, respect that as well.

Direct caregivers should be included. The woman who comes to clean weekly may be aware of certain behavioral changes that an every-other-week visitor would not. Family members might also want to include a spiritual advisor, if the person is a member of a faith-based community.

Every family is unique, and some may benefit from the services of a social worker or gerontologist.

Set an agenda and stick with it. Topics will depend on the situation, such as moving to a different residential setting, the use of alert systems and health care transportation.

An elder law attorney can guide you through the process.

Reference: aPlaceforMom.com (January 2018) “Guide to Elder Care Planning & Family Meetings”

 

 

 

 

 

Healthcare Costs Can Be Shocking in Retirement

 

 

The fear of huge medical bills causes worry to many a retiree.  However, there is hope of solving the situation.

Retirees generally fear that a medical expense shock will decimate their savings.  However, there are ways to make the shock less stressful, according to Reuters in “How to shockproof your retirement healthcare costs.”

Brightwork Partners discovered in a national survey that as many as four out of five boomers agreed that they are worried about this.  However, they are too confused by all the details to actively plan for medical costs during retirement.

Help is on the way from national retirement researchers and investment companies. While most retirement healthcare research focuses on the big picture, like Fidelity’s recent estimate that a couple is likely to spend $280,000 on healthcare costs in retirement, a new study from Mercer Health and Benefits and Vanguard Research got a lot more granular.

The goal of the study is to develop a model that can be used by people before they retire, so they can create a budget that includes this admittedly staggering number. This model will be able to help set necessary saving goals and plan on how to achieve the goal.

An average 65-year-old woman retiring and using Medicare in 2018 will need $5,200 to pay for medical expenses. That’s including Medicare, additional health insurance and out-of-pocket costs. By 85, the cost jumps to $10,100 annually, or, for a less healthy person, $14,000. As they age, people need more health care and researchers say we should consider “healthcare inflation” as starting at 6.6% annually, with a rate of 4.5% over time.

Before retiring, experts say people need to be honest with themselves about their health and the costs that will ensue. If they have chronic illnesses like diabetes, cancer, heart disease or arthritis, they need to expect to spend more than the average amount.

The biggest medical care shock to retirement savings is long-term nursing home care.  However, these researchers found that only one in seven will face those costs for two years or more.

Think about these issues in advance and prepare for the costs. 

Reference: Reuters (July 11, 2018) “How to shockproof your retirement healthcare costs”

 

 

 

You Only Think You Don’t Need an Attorney

 

 

 

The ease of writing your own will or downloading some forms from the Internet, can make you jump to the conclusion that you don’t need professional assistance. There are many reasons why you really need an attorney, according to the Huntsville Item in "Do you really need an estate planning attorney?"

Those reasons include:

• The estate planning attorney knows about property law and how different types of property are handled differently by courts. If you do not get this correct in your will, your estate can face difficulties.
• There are different types of estate planning documents that do different things. Estate planning attorneys can help you pick the right ones for your unique circumstances.
• Estate taxes are still a concern at the federal level for many people and in several states. A professional is needed to properly plan around them.
• The attorney can also help craft your estate plan in a way that compliments your other financial goals, often including paying less in taxes.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.

Reference: The Huntsville Item (May 21, 2018) "Do you really need an estate planning attorney?"

 

 

Medicaid Looks Closely at All Assets

 

Medicaid is likely to ignore any spousal agreements and consider the assets of each spouse when determining eligibility, according to My San Antonio in "Protecting separate assets from Medicaid."

Sometimes a couple will jointly decide to just spend down the assets of the spouse, who may need long-term care, and leave the other spouse with his or her assets. This can complicate things, if one of the spouses might need to go into a nursing home and have Medicaid pay for their care.

There are potentially a couple of ways around this problem. If the couple gets divorced, then the one spouse's assets will not count against the other spouse. Understandably, many people are reluctant to divorce even for getting coverage for a nursing home stay. There is also an income-based program that some people could qualify under, but the rules can be complicated.

An elder law attorney can advise you on your eligibility, if you think that you might need Medicaid to pay for your nursing home stay at some point.

Reference: My San Antonio (May 4, 2018) "Protecting separate assets from Medicaid."

 

A Trust May Protect Assets from Medicaid

 

There are some ways around the problem of having assets and needing Medicaid. A trust is one of the answers, according to the Times Herald-Record in "Benefits of Medicaid Asset Protection Trust."

A Medicaid Asset Protection Trust is a trust that is set up specifically to protect assets from Medicaid, while still qualifying an elderly person for Medicaid assistance with long-term care. These are irrevocable trusts and any assets put into them at least five full years before applying for Medicaid are protected. The trusts are not perfect, since the trust settlors cannot use any of the principal in the trusts. However, income can be used.

An elder law attorney can advise you about a Medicaid Asset Protection Trust.

Reference: Times Herald-Record (March 8, 2018) "Benefits of Medicaid Asset Protection Trust."

 

 

It Might Be Wise to Investigate Medicaid Options

 

 

When many Americans consider the possibility of long-term care in a nursing home and look to insurance, they find that insurance is often difficult to obtain and afford. Medicaid is also a possibility but that needs planning, according to CNBC in "Here's a surprise source you can tap for long-term care services."

The big catch with Medicaid is that it is only available for poor people. To be eligible for Medicaid to pay for nursing home care, the patient needs to have fewer than $2,000 in assets. To get around this problem patients cannot just give all their assets away to family members, when they need to go into a facility. Any such transfers will be deemed fraudulently made and will disqualify them from receiving help.

An elder law attorney can advise you on your options should you be thinking of ways to handle the expense of long-term care.

Reference: CNBC (Feb. 27, 2018) "Here's a surprise source you can tap for long-term care services."