Time & Life Update Newsletter

What is "Life-Care Planning" and Does It Apply To Me?

Posted by Dennis Sullivan & Associates on Jun 24, 2011 4:08:00 PM

Life-Care Planning is a new area of elder law that helps families respond to the challenges presented by long life, illness and disability.  Life-care planning is about being an advocate for your loved one in every long-term care setting and assisting the family with those overwhelming decisions.

A Life-Care Plan includes the following:

  • Legal Care, estate planning, including wills, trusts, powers of attorney and advanced directives; Medicaid planning; guardianships; and protection of the elder's right to safe and effective care for which he/she is entitled.

  • Care Coordination, which includes locating in-home help and services, coordinating home health care and long-term care, family education and decision-making support - for the rest of your loved-one's life.

Life-Care Planning in Practice

Picture you and your wife and your close friends Kathy and Joe - all in your late 60s.  You get together often and enjoy talking about wintering in Florida, lots of golf and enjoying your retirement years.

One day, Joe suffers a serious stroke which leaves him partially paralyzed.  He will need full-time care.  Joe's wife, Kathy, however, cannot provide the full-time care he needs on her own so she seeks the help of their daughter.  The daughter is very willing to help, but she has a family of her own and is subject to her family's needs as well.  Therefore, Kathy will have to get some in-home care for Joe to supplement what she and her daughter can do.

The end result here is that Kathy and Joe’s lifestyle has completely and unexpectedly changed.  Their financial stability is now also at risk with the high cost of in-home care, which is quickly depleting their savings and putting their other assets in jeopardy.  If this continues, Kathy faces the real possibility of becoming an impoverished spouse if she lives long into her senior years. 

Time to Assess Your Situation

This is truly a heartbreaking situation, but not an uncommon one.  Fearing the same thing could someday happen to you, you and your wife decide to consult with your estate planning and financial team. 

You have no children, so you cannot count on them to help in case of a debilitating illness or injury.  Imagine your legal and financial team reviewed your current assets and retirement plan.  You have paid off your house, faithfully saved money in your 401(k) accounts, and have a healthy IRA.  You even have a cottage on Cape Cod.  A devastating illness, however, is no match for the typical American’s retirement savings. 

The current cost of a nursing home is $12,000 per month, $144,000 per year and $720,000 for a 5-year stay in today’s dollars.  In-home care costs are considerably less, at about half the cost of a nursing home stay.  At these rates, a long-term care situation, even for one person, can easily wipe out a couple’s savings.  In addition, a lien could be placed on your homes, preventing you and/or your spouse from selling them or obtaining a reverse mortgage or home equity loan.  (Watch Dennis Sullivan explain how you can take control of your legacy, not leaving your estate to nursing homes or the IRS.)

Moral of the Story:  Plan Ahead - Consider all the options.

After considering your age and the fact that you were both in good health, your estate-planning attorney might recommend looking into long-term care insurance.  To reduce your premiums you might decide to buy a “shared” care plan.  With a shared care plan, a couple can buy a plan for a set amount to be shared.  So instead of buying two $300,000 plans, a couple may choose to buy one $500,000 plan to share, which can save some premiums.  The benefits of such a plan include:

  • The confidence knowing you could handle an unexpected life event if it occurred.

  • The knowledge that if one of you became ill or injured, you would have the resources to be cared for in your own home and not be forced to move into institutionalized care.

  • Asset protection insurance – your retirement savings would not be jeopardized. (Caution:  You must still protect your assets from financial exposure in excess of policy limits.)

Life can change in the blink of an eye, and although you can’t be prepared for everything, you can prepare for long-term care expenses as long as you coordinate your planning to cover risks and provide you with the flexibility and lifestyle that suit your comfort level and budget.

Our Recommendations

In our experience of more than 25 years helping people and their families in this area, it is the combination of the legal and financial protection, which is best.  In-home care insurance pays for your family member to stay at home and also provides a care coordinator to make sure that he/she is taken care of and the level of care is maintained. 

In addition to insurance, it is also very important to have all their assets protected with a protective trust in case an extended nursing-home stay is unavoidable. With the right legal protection of your home and life-savings, your spouse and your legacy will be safe.  You will never become a victim of nursing home poverty.  You will have done all you could to protect yourself, your spouse and your legacy.  If this makes sense to you, please let us know; we will help you get started.  To learn more about protecting your home, spouse, family and life savings, attend a free, educational Trust, Estate & Asset Protection Workshop . Register online or call 800-964-4295 (24/7) for upcoming dates.

Tags: life-care plan, in-home care, long term care, Protective Trusts, Retirement

Medicare vs. Medicaid and The Rise of Alzheimer's Disease

Posted by Dennis Sullivan & Associates on May 4, 2011 5:40:00 PM

Do you know the difference between Medicare and Medicaid?  For ANY senior it is vital to know the difference.  Your future may depend on it, particularly with the new statistics regarding Alzheimer's Disease and other incurable, long-term care illnesses.

According to the World Alzheimer Report 2010, Alzheimer's Disease is taking a terrible toll on the world – not to mention on individual families and their life savings.  With no cure on the horizon, the problem is only expected to get worse.

According to Dr. Daisy Acosta of Alzheimer’s Disease International, “This is a wake-up call that Alzheimer's disease and other dementias are the single most significant health and social crisis of the 21st century.”

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What’s even worse is that dementia is on the rise, and in the US almost half the seniors over age 80 have this tragic disease.  For more information about what you can do to make your life as a caregiver better today, read our free Alzheimer's Resource Guide, or call our office for options about how to pay for care.

So what does this have to do with Medicare & Medicaid?

Medicare provides health care benefits for people over 65, the blind, and the disabled; while Medicaid provides medical benefits for the poor.

Medicare is mainly a type of public health insurance for those age 65 and older. It is their primary health insurance coverage. Many seniors do not realize that Medicare does not pay for long-term care.  Actually, it is excluded! The confusion is easy to understand because Medicare does pay for rehabilitation. So, if a senior citizen is enrolled in the traditional Medicare plan and is hospitalized for a stay of at least three days, and is then admitted into a skilled nursing facility, Medicare may pay - for a short while. But once those Medicare benefits hit 100 consecutive days, you've hit the maximum.

In some cases, Medicare may not even cover the full 100 days. There must be some actual improvement in your condition, otherwise Medicare will decide that it is a long-term care need, and they'll cut you off. Medicare really only cares about you if you can get better. Since diseases like Alzheimer's and Parkinson's have no known cure today, rehabilitation is not possible, so Medicare will not pay for nursing home care if you have Alzheimer's or Parkinson's.

Unlike Medicare, Medicaid will pay for Alzheimer's, Parkinson's, or dementia-related diseases or a decline in functioning due to the aging process. You must, however, exhaust all your resources (including your spouse's as well) first before you will be eligible.  Medicaid, however, is paid for by both federal and state funds but is "administered" on a state level. The federal government covers between 50-80% of the program costs within the state, and the state pays the rest. Therefore, rules can vary from state to state (even county to county) rather dramatically.  Also, the law enables you to take steps to protect your home, life-savings and spouse so they are not impoverished if you go to a nursing home.

So, as you can see, Medicare is health insurance, and Medicaid is public long-term care coverage, but often there are stages in between that require examination and discussion.  For more information, download our free elder guide The Massachusetts Elder Guide to Medicaid, Nursing Homes and Asset Protection or watch Dennis Sullivan being interviewed about how to avoid nursing home poverty on the national talk show, "Ask The Lawyer."

To learn more about your options, call us at (781) 237-2815; (800) 964-4295 (24/7) or register online to attend one of our free workshops.  You need to be informed about your particular situation and for that you’ll need some honest, legal strategies to protect yourself, your spouse, and your hard-earned assets for the future. 

Tags: Nursing Home Costs, Alzheimer's Disease, asset protection, long term care, Medicare, Medicaid, MassHealth, Nursing Home Guide, Nursing Homes

Federal Budget Cuts WILL Impact You!! - March 2011

Posted by Dennis Sullivan & Associates on Mar 24, 2011 1:45:00 PM

The federal government is working to decrease spending in 2011 by making sweeping cuts to federally funded programs, in order to avoid a government shutdown. Many of these cuts will negatively impact seniors. The cuts began in House Resolution 1 (HR 1), passed by the House last month.  Next, focus will turn to the 2012 budget where a new round of cuts will likely take place.  Many believe it will target entitlement programs like Medicaid and Medicare.

As professional members of the AARP Legal Services Network, we have provided more than 300 community educational workshops for members of AARP and others to help them understand about problems that may exist in their planning along with signing opportunities for improvement.  By better understanding their planning options, people are able to confidently take steps to protect themselves and their families.  Click here for more information on our upcoming educational workshops.  You may also download Free Elder Consumer Guides on Medicaid & Asset Protection, Nursing Homes & Assisted Living, Alzheimer's, and others.

Six Reasons You Can't Afford To Become a “Disadvantaged Older Adult”
According to the National Council on Aging (NCOA), the proposed spending cuts in HR 1 would harm senior citizens by severely cutting initiatives that help older Americans sustain their economic independence and physical and emotional health. HR 1 includes:

  1. Cuts of approximately $525 million in services specifically for low-income seniors (including a 64% cut to the Senior Community Service Employment Program);
  2. Cuts of approximately $1 billion in funding for Community Health Centers that serve seniors;
  3. Cuts of $390 million for home energy assistance;
  4. Cuts of $305 million for Community Services Block Grants that currently assist 2.3 million seniors;
  5. Cuts of $1 billion to programs that include senior volunteers; and
  6. Cuts of $625 million to the Social Security Administration (estimated to be over $1 billion by the Social Security Administration as noted below).

The NCOA is deeply concerned by the 64% cut to the Senior Community Service Employment Program (SCSE). According to NCOA, this is the only major job program that is targeted specifically to helping disadvantaged older adults who need to remain in or return to the workforce to avoid financial crisis. I don't need to tell you how many of us had nest eggs that we thought would help us avoid this, until the ongoing financial crises changed everyone's plans.  The cut proposed in HR 1 would result in the loss of over 83,000 part-time jobs. "For older adults aged 55-64, who cannot yet claim Social Security, the loss of this program could be particularly devastating," said Jim Firman, president and CEO of the NCOA.

According to the NCOA, the $390 million cut in the Low Income Home Energy Assistance Program will force older Americans to make life and death decisions between buying food and medicine or home energy.  Many of us thought we'd never be in that position, yet find ourselves only one catastrophe away, regardless of how diligent we thought we've been. This is why I am so passionate about helping people get past their fears of the complexity of proper planning.  It IS very complex, but is not addressing your planning really an option?

AARP Greatly Concerned
The American Association of Retired Persons (AARP) who's mission is to improve the quality of lives of all Americans over 50, is greatly concerned with the immediate cuts contained in HR 1.  AARP President W. Lee Hammond testified March 9 in front of the Senate to urge Congress not to cut funding for the Social Security Administration (SSA). As part of his testimony, Lee pointed out that the SSA received nearly 3,225,000 disability claims in 2010, the highest in its 75-year history. But instead of additional funding to assist with the increased workload, the agency is faced with aggregate funding losses of over $1.093 billion.

Hammond noted that AARP is also greatly concerned about the other cuts contained in the proposal, testifying, "We have equal concern for many other vital health care services and economic security programs, including severe proposed cuts to home energy assistance, nutrition programs and Medicare premium assistance for low income seniors. The budget reflects the priorities of this nation, and any budgetary cuts will impact people, not just programs."

It's Not About Money, It's About Quality Of Life  
HR 1 eliminates funding for the Corporation for National and Community Service (CNCS) and the programs it administers, including the Retired and Senior Volunteer Program, the Foster Grandparent Program, and the Senior Companion Program (collectively the "Senior Corps"). CNCS's budget of about $1.1 billion includes $111 million for the Foster Grandparent Program, $63 million for the Retired and Senior Volunteer Program and $47 million for the Senior Companion Program.

An important facet of becoming a senior is also about perspective.  Hopefully we become a little bit wiser, and we can be in a position to give back to future generations. The Foster Grandparent Program connects older volunteers with opportunities to provide one-on-one mentoring, nurturing and support to children with special needs, exceptional needs or who are academically, socially or financially disadvantaged. The volunteers themselves derive significant emotional and health benefits as a result of providing these services. Foster Grandparents may serve between 15 and 40 hours per week, and low-income volunteers receive a small stipend to help defray the costs of volunteering.

In 2010, approximately 29,100 Grandparent volunteers delivered 24 million hours of service to more than 137,000 children.  The Retired and Senior Volunteer Program (RSVP) provides volunteers to work with nonprofit and public organizations, trains seniors to help them live independently, and provides volunteers to mentor more than 16,000 children. RSVP volunteers are non-stipend volunteers. The average federal cost per volunteer is approximately $140 per volunteer. RSVP also raises funds by applying for grants.

The Senior Companion Program provides volunteers who offer companionship and support to thousands of older and frail adults, helping them to remain independent and in their own homes at a cost much lower than institutional care. They transport clients to medical appointments, help shop for food and basic necessities, and provide companionship to offset isolation. Senior Companions, who receive a modest hourly stipend, also provide respite to family caregivers.

It might be a good time to ask ourselves what the impact would be if funding disappeared for these services and we found ourselves scraping by?  Whether you're on the side of the argument that it's not the government's role to take care of these needs, or that it's the proper role of society to provide a safety net for it's citizens is not the debate here.  The fact is that these are lean times for many, cuts are coming, and now more than ever we cannot be complacent in providing for our own needs and those of our families into the future.

What About The Promise of Those Programs You Paid Into All Those Years?  The Targets for 2012

In a March 3 interview with The Wall Street Journal, House Speaker John Boehner said House Republicans' upcoming budget proposal would curb entitlements, including Social Security and Medicare, acknowledging the political risk of taking on such popular programs. Boehner also stated Republicans would do their best to persuade voters that this is a necessary step. 

Medicaid cuts could also be coming. There is support within the Republican party to turn Medicaid into a block grant program. This would mean states would be given a lump sum of money to distribute as they see fit. Once the money is used up, there would be no additional Medicaid enrollees until the next fiscal year.

 

While it's difficult to predict if proposed changes to these programs will make things better or worse, we can be sure of this:  it will be decided by politics.  I don't know many citizens who prefer to have their future well-being decided by politics.

Conclusion

The coming years will bring great economic challenges for our senior population. Looming cuts to programs directly benefitting seniors are on the horizon with more planned for the future. Now more than ever it is important for seniors and their loved ones to work with trusted legal counsel to come up with a comprehensive plan that will cover how they will access health care and how it will be paid for.  While health care is certainly the largest financial and personal concern for most seniors, it is not the only one.  None of us likes to think of the inevitable scenarios as we age, but I've seen too many real life tragedies to be complacent about the need to make these conversations accessible to the general public.  Our team members have degrees in law, taxation, finance and accounting.  We have spent our professional lives understanding and more importantly helping people and their families unravel these complexities so they can confidently take the steps they need to protect themselves and their futures.  But I can't expect the average person to do that on their own.  The dilemma then is who to trust to guide you through the process. 

It is our hope that our educational newsletters and our many workshops will allow you to get to know us, what we stand for, our values and our competencies, so that we may help you make an educated decision when the time is right.  

Please contact us if you would like additional information on any of the topics addressed in this newsletter or if you would like to discuss a specific issue.  To learn more about or to register for an upcoming workshop, call 800-964-4295 or register online.


To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer's particular circumstances.

 

 

 

 

Tags: Estate Planning, 2011, Estate Planning, Nursing Home Costs, Alzheimer's Disease, Elder Law, long term care, Medicare, Medicaid