You have to work with a comprehensive overview when you are planning for the future. People who go forward with their heads in the sand hoping for the best often receive a rude awakening when certain contingencies present themselves. With this in mind you would be well-advised to apprise yourself of the costs associated with long-term care. These rising expenses are a major concern, particularly within the elder law community.

Some 70% of senior citizens are going to need long-term care at some point so it is not logical to simply assume that you will never need such care. If you combine the average length of stay with the current average cost of residence in nursing homes and assisted-living facilities, you could be looking at expenses of $200,000 or more. A lot of Americans would find it difficult to simply write a check for this figure and not think much of it.

There are strategies to address these costs, however, and one of them involves long-term care insurance.  Long-term care insurance is often thought of as nursing home insurance, assisting the insured by paying all or part of their nursing home expenses.  But many policies permit the insured to use insurance proceeds to pay for in-home assistance that will allow an individual to stay in his or her own house instead of entering a nursing home.

Many people shy away from long-term care insurance because of the high premiums associated with 100% coverage of nursing home expenses.  But there are many options beyond the 100% coverage policy; these options range from partial coverage (to act as a safety net) to life insurance that provides long-term care coverage (to ensure that the entire premium is not lost if no care is needed).  We will have more on these long-term care insurance options in future posts.

Long-term care insurance, while expensive, is frequently the best option for individuals concerned about nursing home costs.  If you are no longer eligible for long-term care insurance and are concerned about the cost of nursing home care, an elder law attorney may be able to assist you with alternative planning to protect your family from the financial burden of nursing home care..

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.

One of the things that you should keep in mind when you are planning for the future is that everything is connected. Estate planning is by its very nature connected to retirement planning because your legacy is going to be impacted by your expenses and the overall financial decisions that you make after you retire. With this in mind, you have to get a handle on the expenses that you anticipate, evaluate your projected income, and create an intelligent, holistic plan for the future.

To this end it is a good idea to be aware of the goings-on in Washington that may have an impact on senior citizens. Right now there is a congressional super committee in place that is hatching a plan for reducing the federal debt by $1.5 trillion over the next 10 years.

A lot of people are not aware of the fact that over a third of federal spending goes toward funding Social Security, Medicare, and Medicaid. All of these programs are relied upon by senior citizens. So if the super committee has to make cuts, these programs may be in the cross hairs.

Another thing to consider with regard to austerity measures is the future of the estate tax. As the laws stand at the present time the estate tax exclusion is going to be reduced to $1 million in 2013, and the rate of the tax is set to rise to 55%. Because of the fact that we are indeed in debt, it may be difficult for people who are in favor of a reduction in the estate tax to make their case, especially when they may be pushing for cuts to these popular programs for seniors at the same time.

These are indeed interesting times in the estate planning community and there is a good bit of uncertainty regarding the future of the estate tax and entitlement programs for seniors. The best way to proceed is to work with an estate planning attorney to devise an intelligent and informed plan and be prepared to make adjustments as relevant changes come down the pike.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.

One things to keep in mind when you are budgeting for your elder years is the high and ever-rising cost of long-term care. Unfortunately many people don’t give it a lot of thought, and there are a couple of different reasons for this. First, some assume that Medicare will pick up all of their health care expenses once they reach the age of eligibility. The reality is that Medicare does not pay for long-term care.

Another common misconception is that most people are not going to need long-term care, so even though it is expensive it is not something that you have to worry about. The facts tell a different tale. The US Department of Health and Human Services tells us that three out of every four individuals who reach the age of 65 will someday need long-term care.

Many people address long-term care expenses by angling toward Medicaid eligibility. Medicaid will pay for long-term care if you can qualify. In fact, 40% of all long-term care expenses incurred in the United States are paid by Medicaid.

A congressional committee is currently considering options for reducing the federal debt by $1.5 trillion over the next 10 years. To do this they will have to cut spending considerably, and both the president and the House of Representatives suggested cuts to Medicaid earlier this year. Given the fact that seniors and the disabled benefit from two-thirds of all Medicaid spending, cuts to the program will clearly have an effect on our nation’s elders.

If you are making preparations for the latter portion of your life, cuts to Medicaid may be significant to you.   If you would like to find out more about the long-term care and Medicaid landscape, arrange for a consultation with an experienced elder law attorney.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.

Last Friday, the Department of Health and Human Services announced that it does not plan to implement the Community Living Assistance Services and Support (CLASS) Act at the present time.  The CLASS Act was intended to act as a federal insurance program for long-term care, particularly in nursing facilities.  The enacting legislation requires HHS to determine that the program will be self-sustaining (that is, it will pay for itself) before going into effect.  Because HHS was not convinced that voluntary premium payments would keep pace with costs of the program, HHS announced that it would not begin implementation.  CLASS Act is currently still on the books but has been left in limbo.

What does this mean for individuals who anticipate needing long-term care?  There are four primary options: First, individuals can “self-insure” by planning to pay any nursing home costs out of their income and assets.  Because of the high costs nursing home care — more than $70,000 per year — and the high risk of needing care, many people are not thrilled by this option.

Second, for individuals who are still relatively healthy, and particularly those around age 55, long-term care insurance may be an option.  While the insurance tends to be somewhat expensive, a person looking at long-term care insurance should keep in mind the potential risk being insured against ($70,000 per year in long-term care costs).  Also, while 100% insurance may be too expensive, a person can get insurance that covers only a portion of long-term care costs to reduce the premiums.  Long-term care policies may also cover care at home in addition to nursing home care.

Third, for individuals not expecting to need nursing home care for at least five years, Medicaid planning may permit protection of some assets from long-term care costs.

Fourth, individuals needing nursing home care now or in the near future may be able to preserve substantial assets through emergency Medicaid planning.

If you have questions about your options for paying for long-term care, talk with an experienced elder law attorney.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.

Unfortunately a lot of people take a “this will never happen to me” attitude about some things, and this can come back to haunt them. Individuals who find themselves prepared for all eventualities don’t think this way. They keep their heads up and face all possible contingencies head on. They may or may not have to put their contingency plans into action, but they are prepared nonetheless and this provides them with a great deal of peace of mind. This in itself can help to keep you healthy as you start to reach an advanced age.

With this in mind, consider the fact that the United States Department of Health and Human Services tells us that seven out of every 10 individuals who reach the age of 65 are eventually going to need some form of long-term care. For men, the average period of time that long-term care is necessary is 2.2 years; for women it is 3.7 years. So, if you want to be prepared for the future you should understand that the odds indicate that you will likely incur long-term care costs.

Veterans who have served during a time of war may be eligible for a benefit that can help to address these costs called the Veterans Aid and Attendance special pension or Veterans A & A. The length of service requirements are modest. If you served a total of 90 days on active duty with at least one of these days taking place during wartime (even if you did not serve in combat) you meet the requirement.

Qualified single veterans who need assistance with their day-to-day needs, things like dressing, eating, bathing, etc. can qualify for a monthly benefit of as much as $1632. Eligible couples may receive up to $1949 per month, and a qualified surviving spouse may qualify for a maximum of $1055 each month.

These benefits can go a long way toward defraying long-term care costs. To learn more about the financial requirements and see whether you or a loved one might be eligible, contact an experienced elder law attorney.  You can also obtain information from the United States Veterans Benefits Administration either online, in person, or over the phone, or from the local Veterans Affairs representative in your county.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.

If you provide long term care as a caregiver on a regular basis, you know how demanding your job duties can be.  While you’re helping your loved one with his or her daily care needs, it undoubtedly takes a toll on your body and your stress level.

It’s important to give yourself the breaks that you deserve so you’re able to function and provide much-needed care.  Here are some helpful tips:

• Ask for assistance. If you have other friends and family members who are able to help out with your loved one, don’t be afraid to ask for help.  By taking some of the duties and dividing them up, the responsibilities will be less stressful for everyone involved.  It is also be a great way to involve the entire family and allows your loved one to be surrounded by a strong support system.
• Take advantage of adult day care programs. Adult day care programs can be a great way to switch up your loved one’s routine.  This type of program allows your loved one to get needed assistance while providing a change in environment.  This will also give you a break in your regular schedule so you can focus on some of your other responsibilities or take much-needed rest.
• Always make a little time for yourself. Even if you just take 15 minutes out of your morning or evening, it’s important to give yourself some “me time” for the sake of your own health and well-being.  If you include a little “me time” in your schedule, you will be able to better handle your caregiver responsibilities and reduce your stress level.

If you’re looking for more advice on how to better handle your caregiver and long-term care responsibilities, consult with a qualified estate planning attorney.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.

It’s becoming more and more popular for family members and friends to assist their loved ones with long term care needs.  This can be a great way to keep a loved one in the home while also allowing her to live a more comfortable life.  If you’re thinking about becoming a caregiver to your loved one, you may want to consider the use of a caregiver agreement.  Caregiver agreements allow you and your loved one to create a care plan.  Take a look at the information below, to better understand how a caregiver agreement works.  If you have any questions, or if you’d like to discuss long term care agreements, contact an estate planning attorney.

• Setting Expectations:  A caregiver agreement can be used to outline certain expectations.  This can give everyone a better understanding of the care that will be provided, and can help your loved one and you agree on daily duties.  It can also help to ensure that all aspects of your loved one’s needs are met.
• Compensation: If compensation is offered, a caregiver agreement can make it easier to spell out the financial terms. This gives everyone a clear understanding of the total compensation as well as the expectations that must be met in order to be paid.  Sometimes, caregiver agreements are used in nursing home planning (i.e. qualifying for Medicaid to pay nursing home costs.)
• Medicaid Qualification:  This agreement can also help your loved one to qualify for certain benefits such as Medicaid.  If drafted in the right way, you can ensure that the compensation that is given doesn’t interfere with your loved one’s ability to receive additional governmental benefits and aid.  On the other hand, compensation that is not properly covered by a caregiver agreement may lead to disqualification from Medicaid benefits.

If you’re considering providing long term care to your loved one, you may consider the use of a caregiver agreement.  With the help of an estate planning attorney, you can ensure that the agreement is legal and effective.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.

We often have elderly clients and their adult children come into our office with the fear, “Will I lose everything to the nursing home?  Fortunately, there are often options to alleviate this fear and protect assets.

Ryan and his elderly father, John, age 71, come into the office for a Medicaid/nursing home consultation.  John is still living independently but is concerned about his future.  He doesn’t want to be a burden on Ryan and his sisters and he doesn’t want to spend any more of his assets on the nursing home than he has to.

Fortunately, there is a lot we can do for John because he is planning ahead.  The Medicaid look back period is five years.  This means that when (and if) John ever needs to apply for Medicaid benefits to pay for nursing home care, Medicaid will look back at his financial transaction over the previous five years.  If there have been financial transfers for less than full value (gifts), he will be disqualified from receiving Medicaid to pay for his nursing home costs for a period of time as determined by a governmental formula.

First and foremost, we will put a good estate plan in place for John.  He names Ryan and his daughters as trusted helpers: executor, trustee, and power of attorney agents.  Because Ryan is a CPA, he chooses Ryan to serve as the primary executor, trustee, and financial power of attorney agent.  Because his daughter, Michelle, is a medical doctor, he names her as his health care power of attorney.  All children serve as back up trusted helpers, or fiduciaries, if the primary fiduciary is unable or unwilling to serve when needed.

We set up an income only trust to protect John’s assets.  He gifts most of his assets into the trust which would provide him income to pay his bills and meet his needs.  This would protect his assets from the nursing home; John decides he wants the assets to pass to his 7 grandchildren at his death.

If you don’t want to save assets from nursing home expenses, be sure to consult with a qualified elder law – estate planning attorney.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.

As our loved ones continue to age, there are often long term care needs that must be addressed.  If you have a loved one who is in need of extra care assistance, you may want to make sure that you understand all of your options.  Take a look at some of the information below to help guide you through the process.  If you have additional questions, or if you need assistance choosing a long term care facility, meet with an estate planning or elder law attorney.

What is long term care and what are the options?

Long term care provides support for those who cannot safely live independently.  Long term care facilities and services help to meet the emotional, medical, and daily needs of each individual.  There are many different long term care options to consider.  Each care option has its own set of features and benefits.

Nursing homes – Nursing homes offer health care and daily physical care support to its residents.  If your loved one has serious health problems, this is an option to consider.  He or she will be able to get some individualized attention and medical care while also receiving help with everyday living needs.  Nursing home care tends to be very expensive.

Assisted living facilities – Assisted living facilities help individuals handle their daily activities.  These are beneficial facilities because each individual is able to maintain some level of independence.  If your loved one were to enter this type of facility, he or she would have his or her own room but would be able to get assistance with everyday activities such as meals, transportation, and social events.  There are also many different social activities that he or she can take part in.  Assisted living is generally not as expensive as nursing home care because less medical care and individual attention is required.

In home care – Home care allows an individual to stay in his or her own home.  If your loved one is determined to stay at home, this is a great option to consider.  Your loved one will be able to get help with everyday activities while also being able to comfortably age at home.  In home care can be expensive, though, depending on the amount of time each week a caregiver is required.

It’s important to take a look at your loved one’s specific needs before deciding on a specific type of long term care facility or service.

What are some of the benefits of long term care?

With the help of long term care, your loved one will be able to live more comfortably and safely because he or she is able to get the assistance that is needed.  This can also take some stress off of you, your loved one, and other family members because there is a plan in place and your loved one is receiving the level of care that is needed.

If you have questions about long term care, consult with a qualified estate planning or elder law attorney.

The Potter Law Firm is a member of the American Academy of Estate Planning Attorneys.