Aging is inherently challenging because you cannot fully understand the way that you will think and feel when you are older. This applies to every stage of life from the time you are child, and it is especially profound as you start to become an older adult.
The IRS recently lowered the required minimum distributions for traditional account holders. They did this because the life expectancy of people that are 72 years of age and older increased by just over two years.
Once you become eligible to receive your full Social Security benefit, your life expectancy is 85 years or more depending on your gender and your medical history. A lot of people do not seriously consider the ramifications of life as an octogenarian, and this is a mistake.
The Alzheimer’s Association provides resources for families that have been touched by this terrible disease, and there is a lot of information about it on their site. More than 6 million Americans are living with Alzheimer’s right now, and the figure is expected to rise to 13 million over the next 25 years.
Approximately one third of seniors will die with Alzheimer’s disease or dementia that is caused by some other underlying condition. It strikes 11.3 percent of all Americans that are 65 years of age and older. Over 11 million people are providing unpaid care for Alzheimer’s sufferers.
You should take the eventualities of aging into account when you are planning your estate. An incapacity planning component should be embedded in your broader estate plan, and it should have two prongs.
A durable power of attorney for property is a device that can be used to empower someone to manage your financial affairs in the event of your incapacity. If you have a living trust, you can name a disability trustee to manage the trust if you become unable to serve as the trustee.
Advance directives for health care should be included as well. A living will is a document that is used to state life-support utilization choices, and you can name a medical decision-maker in a durable power of attorney for health care.
The representative will not be able to access your health records unless you include a HIPAA release. This is another detail that should be addressed when you are creating your incapacity plan.
Family members can only do so much as Alzheimer’s progresses, and this dynamic applies to other health challenges. At some point, nursing home care is the only option, and there are facilities that are specifically designed for patients that are experiencing memory loss.
As you would expect, these facilities are very expensive. You can expect to pay $100,000 or more for a year in a Cincinnati area nursing home, and the costs may rise as the years pass.
Medicare doesn’t cover long-term care, but Medicaid will pay for a stay in a nursing home if you can gain eligibility. You cannot qualify if you have more than $2000 in countable assets, and you are ineligible for five years if you transfer assets out of your name.
However, there is a solution in the form of a Medicaid trust. You would not lose income that is generated by your savings, because you could continue to accept distributions of the earnings if you convey the principal into a trust.
You can maintain your lifestyle while you are living independently, and if you need long-term care at least 60 months after you fund the trust, the principal would not count.
There is also a home ownership benefit. You can qualify for Medicaid if you own a home, but there is an estate recovery mandate. They would put a lien on the home after your death if you were still the owner.
To prevent this outcome, you can convey your home into the trust. Nothing would change with regard to your freedom to live in it as usual, but it would be protected during the Medicaid estate recovery process.
Schedule a Consultation Today!
If you are ready to develop a plan for aging, you can schedule a consultation at our Cincinnati elder care planning office if you call us at 513-721-1513. There is also a contact form on this site you can use if you would like to send us a message.