The Petrosewicz Law Firm Estate Planning Blog

Can You Tackle Elder Law on Your Own?

What usually happens when people do their own estate planning or work on elder law issues, without a lawyer who has years of practice? They may not incur the costs on the front end, but the costs, in financial and emotional terms, often arrive just when the individual or their family is most vulnerable. That message comes through loud and clear in the article “Do-it-yourself elder law estate planning can be risky” from a recent article in the Times Herald-Record.

Let’s clarify the two different areas:

• Estate planning is about leaving assets to heirs with a minimum of court costs, legal fees and avoiding will contests.
• Elder law is concerned with protecting assets from the cost of long-term care and empowering people who will be able to make legal, financial and medical decisions on your behalf, if you become incapacitated.

Two of the most important documents in an elder law estate plan are the Power of Attorney (POA) and health care proxy. If these forms are not prepared correctly, problems will ensue. In some states, like New York, the POA form is long and complicated. Banks and financial institutions will refuse to recognize the form, if they are not completed correctly.

A POA needs to include the “Statutory Gifts Rider,” which allows broad giving powers to the elder law attorney to save assets, even on the eve of the person being admitted to a nursing home. Someone who is not an elder law attorney is not likely to know what this is, or how to prepare it.

There will be similar issues to a do-it-yourself health care proxy. Here’s just one example of the many things that can go wrong: an agent may not make decisions about withholding certain extreme life support measures, even if they are in possession of a valid health care proxy. There needs to be a living will from the individual that explicitly states their wishes regarding withholding heroic means and/or artificial measures. Without the proper document, the person could remain on life support for months or years, even if this was not their wish.

A do-it-yourself approach leaves much to chance. As a result, the potential for problems is enormous. A far better solution that spares spouses and loved ones, is to work with an experienced estate planning lawyer. Can you put a price on peace of mind?

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Times Herald-Record (Nov. 23, 2019) “Do-it-yourself elder law estate planning can be risky”

Many Different Ways to Age: What’s in Your Future?

At some point in life, many people face the decision of moving into a retirement home or welcoming in-home care. Living in these communities can be a step up to aging in a place, where there is actually more independence. This is because you are not busy caring for a house or being confined to a solitary life in a private home. In fact, according to the article “The Many Faces of Aging” from Harrisburg Magazine, it can be a very dynamic option.

Deciding to buy or rent a home in an age-restricted community is a major step toward achieving a new lifestyle. It’s important to consider a number of factors, so you can make the right choice. Here are some questions and answers to consider.

What’s your budget? Make sure that you have the numbers right. Consider additional expenses, like yearly or monthly resident fees. Some luxury communities have equity memberships, which require extra financial investment. Don’t forget taxes.

What are the rules and covenants? Every community will have some kind of homeowner’s association that governs what residents can and cannot do. If you want to have grandchildren stay with you for an extended period of time, make sure that this is permitted in the communities you are considering. The homeowner’s association will implement and enforce restrictions, so know what they are beforehand.

What are the neighbors like? Your future social life is key to your enjoyment of the new community. If you are seeking like-minded people, be sure you’ll know what kind of people live there. Get a sense of the general vibe and personalities. Will you feel included and accepted?

What will a different climate feel like year-round? If you are thinking about moving far from your current home, be sure the new climate suits you. Rent before you buy, if at all possible. A southern home is great during the winter, but if you’re too uncomfortable with summer heat, or living most of your summer in air-conditioned spaces, it may not be for you.

Are there activities you’d enjoy? Make sure the activities you like are offered. If you are a reader, you’ll prefer a community with an active lending library and book groups. A golfer will, of course, want a high-quality golf course (although there will likely be additional fees).

Is good medical care nearby? Every community is different. In large communities, there may be on-site health care services. Some may rely on local ambulance companies and hospitals for all medical care. Medical services that are five minutes away may be a better choice, than those that require a one-hour transport to a hospital.

One of the biggest questions is, can you imagine yourself being happy in the community? If it represents a chance to thrive and grow safely as you age, then it just may be the right place for you.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Harrisburg Magazine (Nov. 8, 2019) “The Many Faces of Aging”

Are Retirement Finances Prepared for Long-Term Care Costs?

Men will need assistance for an average of 2.2 years, and women will need help for 3.7 years, says the U.S. Department of Health and Human Services’ Administration of Aging. Many people are hoping that they can count on receiving care from spouses or children, that is, unpaid care, says The Detroit News in an informative article, “What to know about aging and long-term care costs.” Unfortunately, that’s not always how things work out.

Here’s what often happens:

• More than a third of seniors will need to stay in a nursing home, where the median annual cost of a private room has skyrocketed to more than $100,000.
• Four out of 10 people will opt for paid care at home. The median annual cost of a home health aide is more than $50,000.
• More than 50% of all seniors will incur some kind of long-term care costs, and 15% of those will incur more than $250,000 in costs, according to a study by Vanguard Research and Mercer Health and Benefits.

Medicare doesn’t pay for long-term care. Medicare does not cover what it terms “custodial” care. For most Americans, who have a median of $126,000 in retirement savings, that’s an immediate financial wipeout. They will end up on Medicaid, the government health program that pays for about half of all nursing home and custodial care.

Those who live alone, are in poor health, or have chronic conditions are more likely than others to need long-term care. For women, there are special risks, since statistically women outlive husbands and may not have anyone to provide them with unpaid care. If paying for long-term care for a husband wipes out the couples’ retirement funds, the surviving spouse may be facing a long retirement living on nothing but their Social Security check.

Everyone approaching retirement needs a plan. The options are:

Long-term care insurance. The average annual premium for a 55-year-old couple was $3,050 in 2019. The older you are, the higher the cost and if you have chronic conditions, you may not qualify.

Hybrid long-term care insurance. Life insurance or annuities with long-term care benefits now outsell traditional long-term care insurance by a rate of about four to one. This requires committing a large sum of money up front but is a way to obtain long-term care insurance.

Home equity. Selling a home to pay for nursing home care is not the best solution. However, it may be the only solution, particularly if it’s the only asset. Reverse mortgages may be an option, if one person wants to remain in the home.

Contingency reserve. A wealthy family with assets may simply earmark some assets for long-term care, setting aside a certain amount of money in an investment that can be liquidated without penalty.

Spending down to Medicaid. People with little or no retirement savings could end up depending on Medicaid. There are ways to protect assets for spouses, but it requires working with an elder law estate planning attorney in advance.

The Petrosewicz Law Firm can assist you with your Medicaid needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Detroit News (June 10, 2019) “What to know about aging and long-term care costs”

Long-Term Care Costs and Your Estate Plan

There are many misunderstandings about long-term or nursing home care and how to plan from a financial and legal standpoint. The article “Five myths about nursing home costs and estate planning” from The Sentinel seeks to clarify the facts and dispel the myths. Some of the truths may be a little hard to hear, but they are important to know.

Myth One: Before any benefits can be received for nursing home care, a married couple must have spent at least half of their assets and everything but $120,000. If the person receiving nursing home care is single, they must spend almost all assets on the cost of care, before they qualify for aid.

Fact: Nursing homes have no legal duty to advise anyone before or after they are admitted about this myth.

Several opportunities to spend money on items other than a nursing home include home repairs, debt, a new car, and funeral prepayment. An elder law attorney will know how to use a Medicaid-compliant annuity to preserve assets, without spending them on the cost of care, depending on state law.

There are people who say that an attorney should not help a client take advantage of legally permitted methods to save their money. If those people don’t like the laws, let them lobby to change them. Experienced elder law and estate planning attorneys help middle-class clients preserve their life savings, much like millionaires use CPAs to minimize annual federal income taxes.

Myth Two: The nursing home will take our family’s home if we cannot pay for the cost of care.

Fact: Nursing homes do not want and will not take your home. They just want to be paid. If you can’t afford to pay, the state will use Medicaid money to pay, as long as the family meets the eligibility requirements. The state may eventually attempt to recover against the estate of the person who is on Medicaid to recover funds that the state has used for care.

A good elder law attorney will know how to help the family meet those requirements, so that the adult children are not sued by the nursing home for filial responsibility collection rights, if applicable under state law. The attorney will also know what exceptions and legal loopholes can be used to preserve the family home and avoid estate recovery efforts.

Myth Three. We’ve promised our parents that they’ll never go to a nursing home.

Fact: There is a good chance that an aging parent, because of dementia or the various frailties of aging, will need to go to a nursing home at some point, because the care that is provided is better than what the family can do at home.

What our loved ones really want is to know that they won’t be cast off and abandoned, and that they will get the best care possible. When home care is provided by a spouse over an extended period of time, often both spouses end up needing care.

Myth Four: I love my children equally, so I am going to make all of them my legal agent.

Fact: It’s far better for one child to be appointed as the legal agent, so that disagreements between siblings don’t impact decisions. If health care decisions are delayed because of differing opinions, the doctor will often make the decision for the patient. If children don’t get along in the best of circumstances, don’t expect that to change when an aging parent is facing medical, financial and legal issues in a nursing home.

Myth Five. We did our last will and testament years ago and nothing’s changed, so we don’t need to update anything.

Fact: The most common will leaves everything to a spouse, and thereafter everything goes to the children. That’s fine, until someone has dementia or is in a nursing home. If one spouse is in the nursing home and receiving government benefits, eligibility for the benefits will be lost, if the other spouse dies and leaves assets to the spouse who is receiving care in the nursing home.

A fundamental asset preservation strategy is to make changes to the will. It is not necessary to cut the spouse out of the will, but a well-prepared will can provide for the spouse, preserve assets and maintain the surviving spouse’s Medicaid eligibility.

When there has been a diagnosis of early stage dementia, it is critical that an estate planning attorney’s help be obtained as soon as possible, while the person still has legal capacity to make changes to important documents.

The important lesson for all the myths and facts above: see an experienced estate planning elder law attorney to make sure you are prepared for the best care and to preserve assets.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Sentinel (May 10, 2019) “Five myths about nursing home costs and estate planning”

Long Term Care Decisions Cause Challenges for Families

One year at an assisted living facility in New Hampshire has a median cost of $56,000, and the median annual cost of a semi-private room at a nursing home is $124,000, reports Genworth, a national insurance company known for its annual “cost of care” survey.

Families are often surprised to learn that health insurance and Medicare will pay little, if any, of the costs of long-term care, reports New Hampshire Business Review in the article “The dilemma of long-term care.” Some may try caring for a loved one at home, but this is stressful and often becomes unmanageable. Assisted-living facilities can be wonderful alternatives, if the family can afford them. Long-term care insurance is considered one of the important financial protections as we age, but relatively few people have it.

A growing problem with Medicaid-paid care, is that it can be hard to find a facility that accepts it. Not to mention that the loved one’s assets have to be down to $2,000 (note: this number varies by state), which requires advance planning or becoming impoverished.

Most people have no idea how this part of healthcare works, and then when something occurs, the family is faced with a crisis.

The Department of Health and Human Services projects that as many as 70% of Americans age 65 and older will need long-term care during their lives, for roughly one to three years. Yet little more than a third of all Americans age 40 and older have set aside any money to pay for that care.

There are ways to pay for long-term care, but they require planning in advance. This is something people should start to look into, once they reach 50. The top reason to do the planning: to take the burden of care off of the shoulders of loved ones. From a strictly financial viewpoint, we should all start saving for long-term care as soon as we become adults. However, not everyone does that.

Families pay for long-term care with a mixture of assets:

• Personal savings provide the most flexibility. This is not an option for many, as one half of American households with workers 55 and older have no retirement savings.
• Veterans disability benefits can be used for long-term care services, but the non-disability benefits available to veterans are more limited. They may cover in-home services and adult day care, but not rent at an assisted living facility.
• If a loved one owns a home, they can take out a reverse mortgage and use the lump sum or monthly payout for long-term healthcare needs. The money is repaid, when the home is sold or passed on to an heir.
• Medicare will pay for some long-term care, but only under very limited conditions. It may cover skilled nursing care in a facility but not the care for daily living activities, including toileting, dressing and others. Coverage is all expenses for the first 20 days in a facility and then there is a daily co-pay of about $170 for the next 80 days after which all coverage stops.
• Medicaid is the source of last resort, but what many families eventually turn to.

Planning in advance for long-term care is the best option, and while premiums for long-term healthcare may seem expensive, having insurance is better than having no insurance. For many families, watching the costs consume a lifetime of savings is enough of a spur to planning for long-term care. Speak with an elder law attorney about to prepare for long-term care needs, as part of your estate plan.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: New Hampshire Business Review (May 23, 2019) “The dilemma of long-term care”

Worried about a Spouse Needing Nursing Home Care?

The cost of nursing home care is worrisome for those who are married when a spouse has to go to a nursing home. In the example above, Tom has had some major health issues in the past year and Louise is no longer able to care for him at home.

In this case, the couple lives in Texas where the average cost of nursing home care statewide is $63,017.25 a year ($172.65 per day). The state has a Medicaid program that is a joint state-federal program that will pay for nursing facility care, if a person meets both the medical and financial criteria.

Tom has met one of the major Medicaid threshold requirements because he meets the “medical necessity” criteria.  This means that a doctor has certified that due to illness, injury or disability, Tom requires the level of care and services that can only be provided in a nursing home.

What will happen to their assets?

In 1988, Congress passed the Medicare Catastrophic Coverage Act, which created a process of allocating income and resources between a spouse who needs to live in an institutional setting and the spouse who can continue to remain in a community setting.

Tom and Louise’s resources are divided into two buckets: one that is exempt and the second that is non-exempt.

The family home, car, and household goods and personal effects are exempt or non-countable assets.

Almost everything else, whether they own it together or individually, is considered non-exempt. In Texas, IRAs are the exception if the owner of the IRA is over 70½ years old. However, that is not the same in every state.

Louise is entitled to keep one half of what they own, up to a maximum of $126,420, as of January 1, 2019. This is her “spousal protected resource allowance.”  However, that allowance may be expanded above $126,420 when the couple’s combined income is below a certain threshold.

Anything else they own is used to pay for Tom’s nursing facility care or to purchase a very select group of “exempt” assets, like a replacement car or the cost of a prepaid burial.

If they have given money away in an attempt to preserve some of their assets within the last 5 years, a penalty is imposed, unless an exception applies. They would have needed to give away their resources at least five years preceding an application for Medicaid for there to be no transfer of assets penalty.

Louise needs income to live on so that she is not impoverished. She is entitled to a minimum monthly maintenance needs allowance of $3,160.50. These numbers are federally adjusted yearly and are based on inflation.

To determine how much of Tom’s income Louise can keep, Medicaid looks at Louise’s Social Security benefits, Tom’s Social Security benefits, any pension either of the two may have and any other income sources. She can keep her income.  However, if the couple’s combined income is more than $3,160.50, Tom may have an applied income or co-payment to the nursing home.

Sounds scary? It is. This is why it is so important to do advance planning and have an ongoing working relationship with an attorney with experience in estate planning and elder law. There are changes over time to address the changing circumstances that life and aging presents.  Even if you have an immediate need for long term care and don’t have the luxury of planning in advance, you should still consult with an attorney with experience in estate planning and elder law.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Pittsburgh Post-Gazette (April 29, 2019) “Married and concerned about one of you going to a nursing home?”

Is There Such a Thing as a Good Death?

The best way to achieve a peaceful death, as reported in The Wall Street Journal article “Preparing For a Good End Of Life,” requires planning ahead and having conversations with loved ones, so they are fully aware of your wishes. You’ll want to make sure that they are prepared to carry out your wishes, even when they may not be ready to bid you farewell.

We hope to die in our own beds, at home, surrounded by those we love, relatively pain free and able to say our goodbyes with dignity. However, this is rarely achieved. Pain is a major barrier to death and nearly half of Americans die without the medication that could ease their pain. More than a quarter of Medicare members cycle through an ICU (Intensive Care Unit) in their final month. That is where a fifth of Americans pass away.

Of the hundreds of people who were interviewed for the article, as well as experts in end-of-life medicine, many offered steps that individuals and their loved ones can take in an effort to die in peace.

What does a good death look like to you? Most people worry about having their families burdened by the financial weight of prolonging their life, or by having to make tough medical decisions. Living as long as possible, is at the bottom of most people’s preferences. Imagine what you would want to happen and then plan backwards. Advanced medicine is geared toward technology and prolonging life. The first choice of doctors and hospitals will be to do whatever can be done to maintain life, so you’ll have to be very clear with your family and your estate planning attorney about what you want. Put this in an advance directive. Select someone who has nerves of steel and can advocate for you, when the time comes. This person may not necessarily be a family member — they may be too emotional in a crisis to follow your wishes.

Take charge of your death. Your doctor should be curious about what you want and be willing to listen. If that’s not how your doctor works, you may want to find another one. One woman was told to undergo a series of severe treatments for a stage four cancer that would not have cured her. She made the decision not to continue with that doctor but found one that asked her, simply, “What do you want to accomplish?” In the past eight years, she has lived her life on her terms, relies on a daily pill and a one-time radiation treatment to eliminate pain from the cells that have moved into her spine. She focused on her quality of life.

Understand the path of your diagnosis. Ask your doctor to create an illustration of how you might feel and function during your illness and treatments. A visual will often give you more information than a series of numbers. A sketch may help you understand the start of a precarious health stage when care moves from curing to caring and comfort.

Two of the best deaths studied involved people with little savings, and some of the worst were experienced by people with endless assets and connections. There are government programs for low income people and programs for home care to relieve family caregivers.

Find your tribe and arrange for caregivers. Dying at home takes work. Hospices may provide visits from nurses and other professionals. However, friends, relatives and hired aides will be the ones undertaking the difficult tasks. This doesn’t take training — it takes emotional strength and a willing spirit. One person will be needed to take charge, with a group of part-timers — as many as can be gathered. Having a deep bench of committed friends and family members spreads the care, so no one person is overwhelmed.

Take control of the room. You can’t have candles when oxygen is in use, but there’s a lot that can be done to transform a room to make it more comforting. Turn a window shelf into an altar for flowers, have family photos or religious objects in eyesight. Use electric LED candles to create a sense of a sacred space. If technology isn’t necessary, ask for the removal of machines that beep and tweet.

Remember the role of death. Culturally, we have pushed death away for the last century. However, our ancestors relied on rituals and customs to ease the pain for survivors and those who were passing away. Don’t reduce the end of life to a series of medical processes. Those who contemplate their own mortality and aging, often live better lives and experience better deaths than those who don’t.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Wall Street Journal (Feb. 9, 2019) “Preparing For a Good End Of Life”

Moving to a Care Community? Check the Fine Print

Reading the fine print when purchasing a home in a retirement community or a care community is intimidating. The typeface is tiny, you’ve got boxes to pack and movers to schedule and, well, you know the rest. What most people do, is hope for the best and sign. However, that can lead to trouble, advises Delco Times in the article “Planning Ahead: Moving to a care community? Read the agreement.”

If you don’t want to read the fine print or can’t make head or tails of what you are reading, one option is to ask your estate planning attorney to do so. Without someone reading through and understanding the contract, you and your family may be in for some unpleasant surprises. Here are some things to consider.

What kind of a community are you moving into? If you are moving to a Continuing Care or Life Care Community, your documents will probably have provisions regarding health insurance, entry fees, deposits, a schedule of costs, if you need additional services, fees for moving to a higher level of care and provisions for refunds and estate planning.

When you enter an Assisted Living facility, you may find yourself signing documents regarding everything from laundry policies, pharmacy choices, financial disclosures and statements of your rights as a resident. Not every document you sign will be critical, but you should understand everything you sign.

If moving into a nursing home that accepts Medicaid, you and your family need to know that nursing homes that accept Medicaid are not permitted to demand payment on admission from either an adult child or a power of attorney from their own funds. However, Texas does not yet have support provisions regarding children paying a parent’s medical expenses, called “filial responsibility.” However, you should speak with an elder law attorney if you are applying for Medicaid for a loved one, to make sure you have completed the Medicaid application correctly and are in full compliance with all of the requirements.

If your adult children ask you to sign documents and say “don’t worry” about what the documents are, you may want to sit down with an attorney to review the documents. When someone is not trained to review these documents, they won’t know what red flags to look for.

If someone signs the document who is not the applicant/future resident, that person may become responsible for the costs, depending upon what role you have when you sign: are you a guarantor or indemnitor? That person typically agrees to pay after the applicant/resident’s funds are exhausted. The payments may have to come from their own funds. Sometimes the “responsible party” is simply the person who handles business matters on the applicant’s behalf. You’ll want to be sure that the person signing the papers understands what they are agreeing to.

Almost all agreements will say that the applicant, or the person receiving services, is responsible for payment from their own assets. However, if someone signing the documents is power of attorney, they need to be mindful of what they are signing up for.

If possible, the person who will receive services should be the one who signs any paperwork, but only after a thorough review from an experienced attorney.

The Petrosewicz Law Firm can assist you with your Medicaid needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Delco Times (Feb. 5, 20-19) “Planning Ahead: Moving to a care community? Read the agreement”

New Year’s Resolutions: This Time, Make Them Stick

Recent studies show that about half of Americans still make resolutions, but fewer than 10% of us are successful in maintaining them, says The Sentinel in “Elder Care: New Year’s resolutions.” This year, try making your resolutions simpler and more time-sensitive, and maybe you’ll have more luck maintaining them. Start with your estate plan. A call to your estate planning attorney to make an appointment won’t take a lot of time, and it will get the process started.

Getting your estate plan in order in 2019 will prevent your family from unnecessary stress and costs in the future. Here are a few examples of what can happen to families who don’t plan properly.

A married couple owns a home and some investments. To protect their assets, they create a Revocable Living Trust and transfer all their assets into the trust. They believed that by doing so, they’ll avoid probate and preserve assets from long-term care costs. However, while a revocable trust can avoid probate, if properly created and funded, it has limited other benefits.

When the husband needed nursing care, the couple was surprised to learn that putting their largest asset—their primary residence—in a revocable trust resulted in a situation where the home was counted as an asset for Medicaid to pay for care.

As Texas residents, their principal residence can be excluded for consideration for eligibility—if certain conditions are met. However, federal law specifically directs that real estate in a revocable trust is a countable resource. Had they placed the residence in an Irrevocable Asset Protection Trust five years prior, or even kept the residence out of a trust, they would have had more options.

Not having a will is never a good idea. A local musician had a successful career that resulted in him having a good deal of wealth. He had a son from his first marriage and when his son was born, he told his first wife that he wanted his assets to pass to her upon his death. If she died before him, he wanted his assets to go to his son. However, he never had a will made.

The first marriage ended in divorce, and he became estranged from his son. He had a daughter with a new partner and planned to leave everything to his new partner. If she passed before him, he intended to leave everything to his daughter. However, once again, he failed to have a will made.

With no will, state law governs who receives his assets. In the musician’s case, his assets pass in equal shares to his two children.

Notice that none of his assets pass to his current partner. The only way she could have inherited his assets, would have been for him to have a will. While he had told his partner that he did not want his son to get anything, under state law, his assets are to be split equally between his children.

With an estate that included songs that were copyrighted, both of his children (and any individuals claiming to be his children), may receive income streams. The court must first determine who his legal children are, before any assets can be distributed. A will would have prevented this entire mess.

These are just two examples of what happens when planning is not done correctly, or not at all. Make it one of your priorities to call your estate planning attorney.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

The Petrosewicz Law Firm can assist you with your estate planning and trust needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Sentinel (Jan. 4, 2019) “Elder Care: New Year’s resolutions”

The Retirement Risk No One Wants to Discuss

This is a painful topic that may be harder to talk about than death. The prospect of needing long-term care in a facility is a frightening thought.  It is filled with so many unknowns, that most people just don’t want to bring it up. However, according to this article from CNBC, “Plan ahead to protect your family and your fortune from this retirement risk,” if you work things out in advance, you can find a way to cover the costs, so it won’t ruin your retirement.

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.

Your estate planning attorney will, as part of creating your estate plan, speak with you about how you can go about making the best decisions, when selecting these individuals.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

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