Three Keys To Planning For Long-Term Care

Baby-Boomers and Seniors 2011 Legal Report

I want to dispel two huge myths that routinely produce false security for senior citizens and their adult children: First, a revocable living trust does not protect your assets from nursing home costs or other long-term care expenses. Second, Medicaid is not just for the “poor.”

“Is it time to start thinking about my parent’s long-term care options?”

This question alone may be the most difficult decisions that baby-boomer’s are faced with in 2011. Baby-boomers have been referred to as “the Sandwich Generation” because they often must take on health-related responsibilities for both their own children and their aging parents. Planning for the future should be the #1 New Year’s resolution for baby-boomers and senior citizens.

Key #1: Plan in Advance

The sooner that you or your parents explore and understand the benefits of senior-focused asset protection planning, the better equipped everyone involved will be towards reaching the goal of maintaining your parents’ highest quality of life.

Proper planning can ease anxieties for baby-boomers by removing stressful decision-making and feelings of guilt. Likewise, a senior-focused asset protection plan can ensure that a senior citizen doesn’t feel as if he or she is a “burden” on thefamily.

Key #2: Get on the Same Page

Bringing up the need for long-term planning to an aging parent can be difficult.  But if you understand that the primary goal of this type of planning is maintaining your parents’ highest quality of life for as long as possible, you should be able to effectively communicate that proper advanced planning is in your parents’ best interests.

Just as good parents want what is best for their children, adult children should likewise seek what is best for their parents. The protection, peace of mind, and elimination of uncertainty brought about by proper planning at an early stage is always in the best interests of senior citizens.

Key #3: Select the Right Attorney

Medicaid eligibility rules and veterans’ benefits rules are the most complex areas of law in existence, and it is essential that the attorney your parents work with for their long-term planning has a comprehensive understanding of these laws. The easy way to ensure that an elder law attorney has the requisite knowledge of these laws is to look for the Certified Elder Law Attorney (CELA) designation, which is approved by the American Bar Association.  There are over 5,000 attorneys in the US who practice elder law, but less than 500 of these have passed the full-day exam required to become a CELA.

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How expensive will nursing homes be in 2020?

The cost of growing old is a concept Baby Boomers are beginning to wrestle with as they contemplate long term care options for both themselves and their aging parents. But in today’s age of economic uncertainty and rising care costs, more dependent adults are relying on family members for care. The Wall Street Journal recently reported on a growing trend - compensating a relative to save money. In citing a report by the National Alliance for Caregiving and AARP, the WSJ pointed out that  more than 43 million Americans cared for a friend or relative age 50 or older in 2009. This number has increased by more than 27% since 2004! But this strategy can have drastic consequences that must not be ignored.

Genworth Financial has posted a tool to view median care costs by state, plus future projected costs. Below are some key figures for the Commonwealth of Virginia:

Type of Care - 2010 Median Cost/Year in Virginia - 2020 Projected Cost

Nursing Home Private Room - $73,000  - $118,909

Assisted Living Private Room - $43,182 - $70,339

Adult Day Health Care - $13,780 - $22,446

Home Health Aide - $41,184 - $67,084

If a family opts for relative-care, they must ensure that the relative can provide the assistance that is actually needed. Other important considerations include: Whether to pay the family member, how much to pay, and whether those facts should be disclosed to other family members. And of course, the person receiving the care should always be comfortable with their caretaker. The WSJ article referenced above suggests complete disclosure to the entire family, as a way to ease potential tension. Another important point – if Medicaid eligibility is a goal, there is no substitute to consulting an Elder Law Attorney. Medicaid laws may require a caregiver to be compensated in a specific way.  One common misconception is that Medicaid is only available for the poor. To the contrary, Medicaid is available to anyone who can legally qualify. An Elder Law Attorney should be consulted for Medicaid asset protection planning, because as this article alluded to above, there are nuanced and complicated qualification rules.



Image: renjith krishnan / FreeDigitalPhotos.net

“Seniors and dependent adults are vulnerable in our State”

The National Adult Protective Services Association (NAPSA) has been working with the state-level Adult Protective Service agencies (APS) as part of an ongoing effort to remain up-to-date on the budget issues. The most recent update reported in a newsletter by NAPSA paints a grim financial portrait. What’s worse is that the budget shortfalls are leading to less productivity and more reports of abuse.

According to NAPSA, a survey of APS agencies across the nation yielded 81 results from 30 states. The common thread among responding APS agencies was one of fiscal woe. Budgets were slashed just over 13% for the average APS branch. As if to add insult to injury, two-thirds of the responses indicated reports of abuse as having risen 24%. Almost a quarter of the reporting states has, or is in the process of, reducing or eliminating certain types of investigations.

One representative (from a responding state) said, “Counties have had to make draconian cuts to their social service programs . . . The state has also cut funding to . . . Adult Day Care, Alzheimer’s Day Care: all these programs provided a safety net which has been all but shredded. Seniors and dependent adults are vulnerable in our state.”

Read the newsletter from NAPSA here - State APS Program Budgets Slashed Across US - “The situation is grave”

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