Elder Care Planning
It is natural to assume that the system is set up to address the natural progression of aging. While you are working, you probably get health insurance through your employer, and you pay payroll taxes. These contributions will lead to future eligibility for Social Security and Medicare.
The idea is that Medicare will take care of most of your health care expenses when you are an elder, and you can get additional coverage to fill in the gaps. This is pretty accurate up to a certain point.
What is this point? Most senior citizens will need paid living assistance eventually, and 35 percent of elders will require nursing home care. Those are some attention-getting statistics, and Medicare is not pay for any type of custodial care.
Elder law attorneys help clients that are looking for elder care planning solutions, and this will involve Medicaid eligibility. This program will pay for long-term care, but you cannot qualify if you have more than $2000 in countable assets.
Your home is not counted, but there is a Medicaid estate recovery mandate. If you are the owner of a home when you die, Medicaid can place a lien on the property during the estate recovery phase.
Another complication is the five-year look back period. Let’s say that you give your children their inheritances in advance today because you want to qualify for Medicaid. You would be ineligible for five years, so advance planning is key.
Of course, you may rely on your investments to generate income as part of your retirement plan. If you give away the principal, you will lose the income, and this is not an option for many people.
This is where an elder law attorney can apply their expertise. You can establish and fund an irrevocable, income only Medicaid trust a number of years before you think that you may need long-term care.
In addition to income-producing assets, you can also convey your home into the trust. Before you apply for Medicaid, you can accept distributions of the earnings, so nothing would change on that level. You would give up access to the principal.
If you apply for Medicaid at least 60 months after you fund the trust, the assets will not count. Plus, the home would be protected during the Medicaid estate recovery efforts because you would not own it.
Adult Guardianship Prevention
Another area that would fall into the category of elder law is incapacity planning. This is another one of those subjects that is not a lot of fun to think about, but just under one third of people that are 85 years of age and older have contracted Alzheimer’s disease.
There are other causes of dementia, and there are people that become unable to handle their own affairs due to other conditions. If you do not take any steps in advance to prepare for this possibility, the state could appoint a guardian to act on your behalf.
You can take the matter into your own hands in advance and prevent a guardianship if you work with an elder law attorney to create an incapacity plan. Durable powers of attorney will be part of the plan, and they are used to name agents to make decisions on your behalf in the event of your incapacity.
We are using the plural because you can execute a durable power of attorney for property and a durable power of attorney for health care decision-making. You can assert your life support utilization preferences in a living will, and you can add organ and tissue donation choices.
A HIPAA release should be added as well to give your health care decision-maker the legal right to access your medical records.
Develop a Plan for Aging!
Our doors are open if you are ready to work with a Cincinnati elder law attorney to implement a plan for aging that preserves your legacy. You can send us a message to request a consultation appointment, and we can be reached by phone at 513-721-1513.