When you start to enter your middle-aged years, you will invariably find that you do not have the physical capabilities that you once had, and this is an unfortunate fact of life. At the same time, you can probably handle all of your own day-to-day needs without any assistance.
It can be very difficult to imagine a time when you will not be able to get by on your own, and this is understandable, but longevity statistics are quite instructive.
You will become eligible for a full Social Security benefit when you are between 66 and 67 years of age depending on your birth year. Unless you have a life-threatening medical condition, you probably expect to live long enough to collect your benefit.
If you are around to celebrate your 67th birthday, your life expectancy is 87 years if you are a woman, and it is 85 years for a man. There is a good chance that you will experience life as an octogenarian, and it comes with some potential challenges.
The Alzheimer’s Association is an organization that provides resources for families have been touched by the disease, and they also share useful general information. According to their site, over 6 million people are living with Alzheimer’s right now, and it strikes over 30 percent of the oldest old.
Alzheimer’s causes dementia, but it is not the only underlying cause. When you put all of this into perspective, you can see why you should include an incapacity component within your broader estate plan.
Nursing Home Asset Protection
A significant percentage of senior citizens with Alzheimer’s disease and other dementias require nursing home care. In addition to cognitive impairment, there are those that reside in nursing facilities because of other underlying health conditions.
According to the United States Department of Health and Human Services, 35 percent of seniors will eventually need nursing home care. It is not easy to get out a checkbook to pay for long-term care because you can expect to pay over $100,000 for a year in a nursing home in Cincinnati.
Medicare does not pay for the custodial care that nursing facilities provide, so these costs are a threat your legacy. Medicaid is another government program that does pay for long-term care if you can gain eligibility.
Since it is a need-based program, you have to transfer assets out of your name to create a financial profile that will lead to eligibility. This can be done through utilization of an irrevocable, income only Medicaid trust.
The trust’s earnings could be distributed to you while you are living independently, and this can help you maintain your lifestyle. You would have no access to the principal, but it would not count if you apply for Medicaid. However, advance planning is necessary because you have to fund the trust at least five years before you submit your application.
Your incapacity plan should include documents called advance directives for health care. A durable power of attorney will be used to name an agent to make medical decisions on your behalf in the event of your incapacity.
The Health Insurance Portability and Accountability Act is in place to protect patient privacy. There is a provision in it that prevents doctors from sharing medical records with anyone other than the patient.
With this in mind, you should include a HIPAA release to give your agent access to your medical information. The plan should also include a living will, which is a document that is used to state your life support preferences.
For financial matters, you can execute a durable power of attorney for property. If you have a living trust, you can name a disability trustee that will act as the administrator if you ever become unable to manage the trust on your own.
We Are Here to Help!
If you are here because you are thinking about putting an estate plan in place, today is the day for action. You can rest assured that you will feel comfortable from the start when you choose our firm, and we will help you develop a plan that is ideal for you and your family.
There is a contact form on this site you can use to request a consultation appointment, and our Cincinnati estate planning office can be reached by phone at 513-721-1513.
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