We are living longer. Because of advances in medicine and health care, many of us can expect to live well into our 70's and 80's.
Our increased longevity means we must plan for our future with greater care. We live in a time when fewer and fewer elderly can expect other family members to care for them. Parents see children burdened by tremendous demands upon their time, energy and money. Often, our children and their spouses are both working just to make ends meet. As parents, we have become reluctant to impose an additional "burden" upon them. Even in those cases where children welcome the opportunity and can afford to care for their elderly parents, medical concerns may prevent them from doing so in their home.
The same considerations apply to elderly spouses. No matter how much they desire to remain together, no matter how willing one may be to care for the other at home, medical considerations may dictate that one of them enter a nursing home.
Unfortunately, entry into a nursing home often has devastating and heartbreaking financial consequences. The advances in medicine and health care that enable us to live longer, also carry a hefty price tag. In the past ten years, medical and nursing home costs have soared. While government programs will pay for many of these medical and nursing home costs, government programs are usually available only after all of our own financial resources are exhausted. In such cases, the spouse who remains at home may be left with nothing but minimal governmental assistance. Neither parent will have much, if anything, to pass on to their children.
You can protect yourself, your spouse and your estate.
Fortunately, most of us can avoid, or at least minimize, the devastating financial consequences connected with medical and nursing home care. Surprisingly, few people (including professionals such as lawyers and accountants) realize this. Even fewer realize that steps taken now to avoid or minimize losses resulting from nursing home and medical costs, will also likely avoid guardianship and probate costs. The key is PLANNING.
No single approach is best for everyone. Different cases require different strategies. Therefore, when you begin to consider the possibility of nursing home and medical care for yourself or an elderly family member, seek competent legal and other professional advice. Not all professional planners have the knowledge and expertise necessary to advise you in this area. In fact, most professional planners (lawyers, accountants, insurance representatives, etc.) are primarily involved in estate planning as a means of minimizing gift and estate taxes for the wealthy. Planning for nursing home and medical expenses, unlike tax planning, is particularly suited to the middle class family who has managed to accumulate at least a modest estate and who believes it is worth protecting.
Finally, it must be emphasized that such planning does not involve illegal or fraudulent transfers of property or concealment of assets. Never accept advice from any professional (or other person) who suggests such action as a means of protecting your estate. The last thing you or any elderly family member need is involvement in a lawsuit or criminal proceeding. Good planning is ethical planning. It will enable you to protect yourself and your estate without violating any law or governmental regulation, and it will give you the peace of mind that comes with a clear conscience.
Frequently asked questions:
Q. What is the purpose of planning?
A. The purpose of this type of planning is to preserve your assets for you or your spouse (or other family members) if one or both of you require nursing home or related medical care. However, this kind of planning usually eliminates probate and guardianship expenses as well.
Q. Won't the government pay for my nursing home costs and related medical care?
A. The government may pay for rehabilitative care in a skilled nursing home for up to 100 days. This does not include long-term care. The government will pay for long-term care only after your own assets have been reduced to a minimal level.
Q. If I am already in a nursing home, can I still take steps to protect my assets?
A. Yes, in many cases. However, your options may be more limited and you may not be able to save as much as you would have, had you acted earlier. Nevertheless, the savings can be substantial.
Q. At what age should I begin planning?
A. Any time at or near retirement would be an appropriate age to consider planning. However, age is not always the deciding factor. Your health and the health of your spouse, the amount and types of assets you own and various other family considerations can be just as important, or even more so.
Q. Must I own substantial assets to make planning worthwhile for me?
A. No. Depending on your circumstances, a person with as little as $25,000.00 may find advance planning worthwhile.
Q. Will eligibility for medical assistance entitle me to less care or quality of care than someone who is on a private pay basis?
A. No. In fact, the experience of those in the health care business is that many private pay clients get care inferior to those receiving Medical Assistance. Unfortunately, many private pay clients are reluctant to spend money for additional services which are provided to clients receiving Medical Assistance.
Q. Will this planning affect my need for nursing home insurance?
A. Yes, in many cases. With proper planning, nursing home insurance may be unnecessary. At worst, you may need it only temporarily.
Q. How much does planning cost?
A. There is no set fee for such planning. The fee will be based on the amount of time required to develop a plan to meet your needs.
Q. Are actions taken to protect my assets illegal or unethical?
A. No. Proper planning will be in compliance with all laws and government regulations.
Q. How do I find a competent professional to advise me?
A. Unfortunately, there is no easy answer to this question. To date, relatively few professionals have taken the time to become knowledgeable of the Medical Assistance regulations and to develop the expertise necessary to provide clients with a comprehensive analysis of their options. A qualified professional will:
Explain the law to you;
Ask for information regarding your health, particular family circumstances and objectives;
Estimate the costs in your first office conference;
Provide you with a comprehensive analysis and make his or her recommendations very
specific and in writing;
Be able to competently represent you in the event of a later dispute with a governmental