Estate Planning Blog Articles

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What’s the Key to Saving Money in Retirement?

Of the many expenses for retirees, healthcare can be one of the biggest. There are Medicare premiums and prescription drugs. These healthcare expenses can take up a large part of your retirement savings. Some projections say that the average 65-year-old man today will spend $189,687 on healthcare expenses in retirement, and a typical 65-year-old woman will spend $214,565. These figures don’t include long-term care, such as nursing home expenses.

Motley Fool’s recent entitled “How to Save Money on Healthcare in Retirement” explains that there are steps you can take to decrease your healthcare costs in retirement. Let’s look at a few ways to save money, when you’re limited to a fixed income.

  1. Use Medicare’s free preventive services. Medicare eligibility starts at age 65. Once enrolled, you have access to many no-cost benefits aimed at helping you stay healthy. However, many seniors don’t take advantage of these services and lose an opportunity to get ahead of health issues. Medicare enrollees get a free wellness visit with a doctor every year, and scheduling that could help avoid a separate bill later. Many critical health screenings are also free under Medicare, including mammograms and certain cancer screenings, diabetes testing and depression screenings. Taking advantage of these free services is a great way to keep your health in the best possible shape, which will lower your overall healthcare costs.
  2. Nip health issues in the bud. Small health issues can become big ones, if left unattended. An easy way to save money on healthcare in retirement, is to address medical issues before they get worse.
  3. Look at a Medicare Advantage Plan. One reason why healthcare is so expensive in retirement, is that many essential services aren’t covered under traditional Medicare, like dental care, vision services and hearing aids. If you opt for a Medicare Advantage plan, however, you might save money on these and other critical services. Medicare Advantage typically provides a wider range of benefits, and in some cases, you could wind up paying less for Medicare Advantage than traditional Medicare—with that improved coverage. Medicare Advantage can also save you money, by decreasing your out-of-pocket spending. Most of these plans put a cap on that figure, but traditional Medicare has no limits on your yearly costs.
  4. Compare the Best Prescription Drug Plan. If you take prescription drugs, you need to find a cost-effective plan. If you’re enrolled in traditional Medicare, you’ll need a separate Part D plan to cover your drug costs. However, not all plans are the same. Do some comparison shopping to see which plans offer the best deals, based on the medications you’re taking.
  5. Purchase Long-Term Care Insurance. At least 70% of seniors age 65 and over will require some type of long-term care in their lifetime. That’s why long-term care insurance is needed. The younger you are when you apply, the more likely you’re going to get approved and get the best rates.

Saving money on healthcare in retirement will let your nest egg last longer and buy you more freedom to enjoy your golden years. Learn about healthcare costs, so you’re ready to lower your expenses and avoid the financial stress that so many of today’s seniors face.

Reference: Motley Fool (May 19, 2020) “How to Save Money on Healthcare in Retirement”

 

Caring for a Loved One from a Distance

Trying to coordinate care from a distance becomes a challenge for many, especially since as many as 80% of caregivers are working. Add COVID-19 into the mix, and the situation becomes even more difficult, reports the article “When your parent is far away and you are trying to care for them” from the Pittsburgh Post-Gazette.

The starting point is to have the person you are caring for give you legal authorization to act on their behalf with a Power of Attorney for financial affairs and a Health Care Directive that gives you authority to receive health information under HIPAA (Health Insurance Portability and Accountability Act). It is HIPAA that addresses the use, disclosure and protection of sensitive patient information.

Next, have a conversation about their finances. Find out where all of their important documents are, including insurance policies (long-term care, health, life, auto, home), Social Security and Medicare cards. You’ll want to know where their tax documents are, which will provide you with information on retirement accounts, bank accounts and investments.

Gather up family documents, including birth, death, and marriage certificates. Make sure your loved one has completed their estate planning, including a last will and testament.

Put all of this information into a binder, so you have access to it easily.

Because you are far from your loved one, you may want to set up a care plan. What kind of care do they have in place right now, and what do you anticipate they may need in the near future? There should also be a contingency plan for emergencies, which seem to occur when they are least expected.

Find a geriatric care manager or a social worker who can do a needs assessment and help coordinate services, including shopping for groceries, medication administration and help with basic activities of daily living, including bathing, toileting, getting in and out of bed, eating and dressing.

If possible, develop a list of neighbors, friends or fellow worshippers who might create a local support system. If you are not able to visit with any degree of frequency, find a way to see your loved ones on a regular basis through video calls. It is impossible to accurately assess a person’s well-being, without being able to see them. In the past, dramatic changes weren’t revealed until family members made a trip. Today, you’ll be able to see your loved one using technology.

You may need to purchase a smartphone or a tablet, but it will be worth the investment. A medical alert system will provide further peace of mind for all concerned. Regular conference calls with caregivers and your loved one will keep everyone in touch.

Caring from a distance is difficult, but a well-thought out plan and preparing for all situations will make your loved one safer.

Reference: Pittsburgh Post-Gazette (Sep. 28, 2020) “When your parent is far away and you are trying to care for them”

What Does Research Say about Senior Well-Being and Living Space Design?

Design’s Impact on Seniors’ Perceptions of Wellness from New York-based architecture firm Perkins Eastman, reviewed the responses of 540 older adults living in three West Coast senior living communities to see how they looked at their own physical, social/emotional and intellectual wellness.

McKnight’s Senior Living’s recent article entitled  “90% of senior living residents say design integral to well-being: study” explains that the study started many years before the impact of COVID-19 on the senior living sector. It included responses from residents living in three life plan communities, also known as continuing care retirement communities: MonteCedro in Altadena, CA; Spring Lake Village in Santa Rosa, CA; and Rockwood Retirement Communities in Spokane, WA. The three communities were chosen due to their focus on whole-person wellness and specific design strategies to support that objective.

The residents of these communities completed questionnaires between 2015 and 2017 at certain points of pre-construction, post-construction, and occupancy. The study looked at these wellness strategies used by designers:

  • Autonomy, control and choice
  • Design in variety
  • Promotion of use through location and access
  • Patterns of movement
  • Natural connections
  • Touch of serendipity
  • Degrees of privacy
  • Layers of light
  • Sensory experiences; and
  • Feelings of home.

The results showed that more than 90% felt that design strategies used in their communities were essential to their overall well-being. Research showed that residents’ perceptions of wellness positively increased or held steady after they began using new or renovated spaces in their communities. The aspects that exhibited the most improvement in physical wellness in all communities was access to physical wellness resources and exercising regularly.  In addition, social/emotional wellness, access to resources, a strong support system, and a sense of connection and belonging also improved across all three communities.

The residents’ access to intellectual wellness resources were seen as better, and there were more opportunities for residents to expand their knowledge and explore the creative arts.

The authors of the study said the design strategies in the study should be a “starting point” upon which designers and providers can expand, while developing more strategies and approaches to support “whole-person wellness”.

Reference: McKnight’s Senior Living (Sep. 8, 2020) “90% of senior living residents say design integral to well-being: study”

Does the Netherlands have the Right Idea for Elder Care?

Is the Netherlands getting its money’s worth from its spending, and are they protecting elders from the impoverishing effects of out-of-pocket spending, and their children from the burdens of caregiving?

Forbes’ recent article entitled “Can The Dutch Example Help Us Improve Long-Term Care And Manage Its Costs? Maybe” says that when investigating further, it’s not hard to find articles praising the Dutch approach to eldercare. Its “Dementia Village” has received a lot of press for its patient-friendly approach of creating a secure, “Truman Show”-style community where seniors can spend time at the town square or shopping at the grocery store. They also live in individual homes styled in the manner of their youth.

An expert on eldercare at Access Health International described her experiences in a visit to the country. She said that the organizations she visited focused on well-being, wellness and lifestyle choices. They focused less on the medical aspects of chronic and long-term care. The groups didn’t consider themselves to be part of the curative branch of the healthcare system—these healthcare professionals only focused on patients’ individual capabilities, freedom, autonomy and wellness.

The article took a look at the FICA-equivalent taxes in the Netherlands with data from the Social Security Programs Throughout the World, at the Social Security website. For old age, disability and survivor’s benefits (the U.S. Social Security-equivalent), the Dutch contribute 20% of their pay, to a max of $37,700. Employers pay 6.27% of pay, up to $60,600. For medical, the system is a hybrid one. The workers buy private insurance. Employers pay 6.90% of covered payroll (with no limit), and the government subsidizes the benefits. As far as long-term care, workers pay 9.65% of earnings up to $37,700.

A World Bank consultant gave a more detailed review of the Dutch system in a 2017 paper entitled, Aging and Long-Term Care Systems: A Review of Finance and Governance Arrangements in Europe, North America and Asia-Pacific.

The first social insurance benefit for long-term care, the Exceptional Medical Expenses Act was implemented in 1968. In 2014, 5% of Dutch people received benefits through the program, but the cost of the system had increased. At first, the Dutch government initially tried to control costs with budget caps, until a 1999 ruling outlawed these. As a result, costs grew from EUR 15.9 billion in 2001 to EUR 27.8 in 2014, even though there were cost-control efforts, like increases in copays required from middle- and upper-income families and tightening of eligibility criteria.

In 2015, the Dutch government totally overhauled its system with the Long-term Care Act. This law had a new administrative structure, changes so government pays for more services, more home support instead of nursing homes when possible, and other cuts and freezes in reimbursement rates.

As a consequence, the English-language site Dutch News reported in 2017 that “At least 40% of Dutch nursing homes and home nursing organizations are making a loss and overall profitability across the healthcare sector has more than halved, according to accountancy group EY,” as reimbursement rates drop and (since the less-frail elderly are more often being cared for at home) nursing home residents need more help.

Elder care isn’t free of charge, but the rates are based on income and, at a maximum, are still much lower than American private-pay nursing home or home care costs ($2,500/month). Therefore, copayments by families are 8.7% of total spending. Thus, taxes are higher, but the direct out-of-pocket costs of care in the Netherlands are substantially lower than in the U.S.

The Netherlands’ systematized provision of home care and attempts to provide home-like nursing homes are appealing. However, it’s still not known if the country’s 2015 reform will control costs to ensure its programs are sustainable in the long run. Further, the fact that this reform was required supports the notion that an expansive government program isn’t as simple as its proponents would like it to be.

Reference: Forbes (Sep. 1, 2020) “Can The Dutch Example Help Us Improve Long-Term Care And Manage Its Costs? Maybe.”

Can Senior Care Facilities Use ‘Granny Cams’?

A bill in Georgia that would permit residents in assisted living communities and personal care homes to install electronic monitoring equipment in their rooms has been met with resistance. There are some members of the long-term care industry the oppose HB 849, so-called “granny cam” legislation due to privacy issues. The legislation—which also covers nursing homes—was introduced by state representative Demetrius Douglas (D-Stockbridge). Douglas contends that the technology is needed now more than ever.

Several states have similar laws.

McKnight’s Senior Living’s recent article entitled “Georgia Legislature blocks ‘granny cam’ legislation; industry reps raised concerns” reports that Tony Marshall, president and CEO of the Georgia Health Care Association, says he previously spoke with Douglas and other legislators about the granny cam bill and his concerns. He said concerns were also shared by the state ombudsman and various advocacy groups.

“Surveillance cameras observe — they do not protect — and the use of such cameras in a healthcare setting significantly increases the risk of violating HIPAA [Health Insurance Portability and Accountability Act], federal and state privacy regulations,” Marshall told McKnight’s Senior Living. “We also have concerns related to several other technical aspects of the bill.”

Marshall also noted that the Georgia Health Care Association supports “transparency and measures to ensure that the highest quality of care is being provided to elderly Georgians,” while also “valuing a home-like setting and honoring each resident’s dignity and right to privacy.”

He said his association believes that true quality improvement happens by collaborative efforts with legislators and other players to bolster the ability of nursing centers to recruit and retain a skilled, competent workforce. This also will “further programs designed to educate healthcare professionals, consumers and communities-at-large on abuse prevention and identification,” Marshall said.

The bill allows electronic monitoring equipment to be put in a resident’s rooms in assisted living communities, personal care homes, skilled nursing facilities and intermediate care homes. The resident would be required to provide written consent from any roommate and notify the facility before installing a device. A sign must also to be posted to let visitors and staff members know about the granny cam. The facility also wouldn’t be permitted to access any video or audio recording from the resident’s device.

Douglas said the pandemic has shown the need for cameras and noted that other states have adopted similar measures, according to the Atlanta Journal-Constitution. The state legislator remarked that he introduced the legislation after being contacted during the lockdown by family members, who said they weren’t told about outbreaks or immediately told when an elderly family member died.

There are six states—Minnesota, Missouri, North Dakota, Oklahoma, South Dakota, Texas, and Utah—that have laws requiring assisted living communities to accommodate resident requests to install electronic monitoring equipment in their rooms.

New Jersey also has a “Safe Care Cam” program that loans such equipment to healthcare consumers, including families of assisted living and nursing home residents.

Reference: McKnight’s Senior Living (Sep. 15, 2020) “Georgia Legislature blocks ‘granny cam’ legislation; industry reps raised concerns”

Should You Include a Letter of Instruction with Your Estate Plan?

A letter of instruction, or LOI, is a good addition to the documents included in your estate plan. It’s commonly used to express advice, wishes and practical information to help the people who will be taking care of your affairs, if you become incapacitated or die. According to this recent article “Letter of instruction in elder law estate plan can help with managing important information” from the Times Herald-Record, there are many different ways an LOI can help.

In our digital world, you might want to use your LOI to record website names, usernames and passwords for social media accounts, online accounts and other digital assets. This helps loved ones who you want to have access to your online life.

If you have minor children who are beneficiaries, the LOI is a good way to share your priorities to the trustee on your wishes for the funds left for their care. It is common to leave money in trust for HEMS—for “Health, Education, Maintenance and Support.” However, you may want to be more specific, both about how money is to be spent and to share your thoughts about the path you’d like their lives to take in your absence.

Art collectors or anyone who owns valuable items, like musical instruments, antiques or collectibles may use the LOI as an inventory that will be greatly appreciated by your executor. By providing a carefully created list of the items and any details, you’ll increase the likelihood that the collections will be considered by a potential purchaser. This would also be a good place to include any resources about the collections that you know of, but your heirs may not, like appraisers.

Animal lovers can use an LOI to share personalities, likes, dislikes and behavioral quirks of beloved pets, so their new caregivers will be better prepared. In most states, a pet trust can be created to name a caregiver and a trustee for funds that are designated for the pet’s care. The caregiver and the trustee may be the same person, or they may be two different individuals.

For families who have a special needs member, an LOI is a useful means of sharing important information about the person and is often referred to as a “Letter of Intent.” It works in tandem with a Special Needs Trust, which is created to leave assets to a person who receives government benefits without putting means-tested benefits in jeopardy. If there is no Special Needs Trust and the person receives an inheritance, they could lose access to their benefits.

Some of the information in a Letter of Intent includes information on the nature of the disability, daily routines, medications, fears, preferred activities and anything that would help a caregiver provide better care, if the primary caregiver dies.

The LOI can also be used to provide basic information, like where important documents are kept, who should be notified in case of death or incapacity, which bills should be paid, what home maintenance tasks need to be taken care of and who provides the services, etc. It is a useful document to help those you leave behind to adjust to their new responsibilities and care for loved ones.

Reference: Times Herald-Record (Sep. 8, 2020) “Letter of instruction in elder law estate plan can help with managing important information”

How to Keep Track of Mom’s Healthcare Information if She Gets Sick or Injured

It’s common for seniors to have several chronic medical conditions that must be closely monitored and for which they take any number of prescription medications. Family caregivers usually are given a crash course in nursing and managing medical care, when they start helping an aging loved one. The greatest lesson is that organization is key, which is especially true when a senior requires urgent medical care.

Physicians encounter countless patients and families who struggle to convey important medical details to health care staff, according to The (Battle Ground, WA ) Reflector’s recent article titled “The emergency medical file every caregiver should create.”

A great solution is to create a packet that contains information that caregivers should have. Here’s what should be in this emergency file:

Medications. Make a list of all your senior’s prescription and over-the-counter medications, with dosages and how frequently they’re taken.

Allergies. Note if your loved one is allergic to any medications, additives, preservatives, or materials, like latex or adhesives. You should also note the severity of their reaction to each of these.

Physicians. Put down the name and contact info for the patient’s primary care physician, as well as any regularly seen specialists, like a cardiologist or a neurologist.

Medical Conditions. Provide the basics about your senior’s serious physical and mental conditions, along with their medical history. This can include diabetes, a pacemaker, dementia, falls and any heart attacks or strokes. You should also list pertinent dates.

Do Not Resuscitate (DNR) Order. If a senior doesn’t want to receive CPR or intubation if they go into cardiac or respiratory arrest, include a copy of their state-sponsored and physician-signed DNR order or Physician Orders for Life-Sustaining Treatment (POLST) form.

Medical Power of Attorney. Keep a copy of a medical power of attorney (POA) in the packet. This is important for communicating with medical staff and making health care decisions. You should also check that the contact information is included on or with the form.

Recent Lab Results. Include copies of your senior’s most recent lab tests, which can be very helpful for physicians who are trying to make a diagnosis and decide on a course of treatment without a complete medical history. This can include the most recent EKGs, complete blood counts and kidney function and liver function tests.

Insurance Info. Provide copies of both sides of all current insurance cards. Include the Medicare Supplement Insurance (Medigap) and Medicare Prescription Drug Plan (Part D) cards (if applicable). This will help ensure that the billing is done correctly.

Photo ID. Emergency rooms must treat patients, even if they don’t have identification or insurance information However, many urgent care centers require a picture ID to see patients. You should also include a copy of their driver’s license in the folder.

Once you have all the records, assemble the folder and put it in an easily accessible location. Give the packet to paramedics responding to 911 calls. It should also be brought to any visits at an urgent care clinic.

Reference: The (Battle Ground, WA ) Reflector (Sep. 14, 2020) “The emergency medical file every caregiver should create”

New Survey Conducted on Keeping the Elderly Safe in the Pandemic

Those in our oldest generations, who were recently surveyed, were found to be more distrustful of senior living and care operators than younger generations.

Nearly half (49.5%) of baby boomers said they don’t trust senior living and care providers to keep residents safe, while 43.9% of the Silent Generation reported the same distrust.

Younger people are more trusting: 42.3% of Generation X reported distrust, 31.8% of millennials and 38.2% of Generation Z.

McKnight Senior Living’s recent article entitled “41% don’t trust assisted living, nursing homes to keep residents safe during pandemic: survey” notes that 43.1% of baby boomers responded that they trust facilities “somewhat,” as did 51.4% of the Silent Generation respondents.

Some of this mistrust may come from the extensive media coverage of coronavirus deaths in nursing homes because senior residents are especially vulnerable to the illness.

Some say that it goes further than that: the quarantine and social distancing has added to families’ stress and anxiety over the safety and mental well-being of the seniors who live in these facilities because they aren’t able to visit as often as they want.

An online survey from ValuePenguin.com and LendingTree of more than 1,100 Americans recently found that COVID-19 has generated a rush of loneliness and worry among older adults.

According to the results, 36% of older adults feel lonelier than ever. In addition, more than 70% of seniors said that they have worries about the virus’ effects on their younger relatives. Those concerns were equally expressed by younger generations for their older relatives. Almost 50% of both age groups are worried that their relatives will catch the virus.

However, the pandemic looks to have a silver lining for family communications. An overriding sense of concern for the mental and physical health of elderly loved ones has led to more contact since the pandemic began.

Nearly 44% of the younger survey-takers stated they’ve spoken to their older relatives more frequently during the pandemic, about 25% of young people reported visiting their older relatives in person more frequently.

The top request from respondents aged 75 and older to their loved ones, is to call more frequently.

Reference: McKnight Senior Living (Sep. 11, 2020) “41% don’t trust assisted living, nursing homes to keep residents safe during pandemic: survey”

How Do I Keep My Assets from the Nursing Home?

If you don’t have a plan for your assets when it comes time for nursing home care, they can be at risk. Begin planning now for the expenses of senior living. The first step is to consider the role of Medicaid in paying for nursing home services.

WRCB’s recent article entitled “How to Protect Your Assets from Nursing Homes” describes the way in which Medicaid helps pay for nursing homes and what you can do to shield your assets.

One issue is confusing nursing homes and skilled nursing facilities. Medicare does cover a stay in a skilled nursing facility for convalescence. However, it doesn’t pay for full-time residence in a nursing home. For people who can’t afford to pay and don’t have long-term care insurance, they can apply for Medicaid. That’s a government program that can pay nursing home costs for those with a low income. People who don’t have the savings to pay for nursing home care and then require that level of care, may be able to use Medicaid.

For those who don’t qualify for Medicaid when they need nursing home care, they may become eligible when their savings are depleted. With less money in the bank and minimal income, Medicaid can pay for nursing home care. It is also important to remember that when a Medicaid recipient dies, the government may recoup the benefits provided for nursing home care from the estate. Family members may discover that this will impact their inheritance. To avoid this, look at these ways to protect assets from nursing home expenses.

Give Away Assets. Giving loved ones your assets as gifts can help keep them from being taken by the government when you die. However, there may be tax consequences and could render you Medicaid ineligible.

Create an Irrevocable Trust. When assets are placed in an irrevocable trust, they can no longer belong to you because you name an independent trustee. The only exception is that Medicaid can take assets that were yours five years before you died. Therefore, you need to do this as soon as you know you’re going into a nursing home.

Contact an experienced estate planning, elder law, or Medicaid planning attorney to help you protect your assets. The more you delay, the less likely you’ll be able to protect them.

Reference: WRCB (Dayton) (Sep. 4, 2020) “How to Protect Your Assets from Nursing Homes”

How Do I Find a Great Elder Law Attorney?

Elder law attorneys specialize in legal affairs that uniquely concern seniors and their adult children, says Explosion’s recent article entitled “The Complete Guide on How to Find an Elder Law Attorney.”

Finding the right elder law attorney can be a big task. However, with the right tips, you can find an experienced elder law attorney who is knowledgeable, has the right connections and fits your budget.

While, technically, a general practice attorney will be able to handle your retirement, Medicaid and even your estate planning, an elder law lawyer is deeply entrenched in elder law. This means he or she will have extensive knowledge and experience to handle any case within the scope of elder law, like the following:

  • Retirement planning
  • Long-term care planning and insurance
  • Medicaid
  • Estate planning
  • Social Security
  • Veterans’ benefits; and
  • Other related areas of law.

While a general practice lawyer may be able to help you with one or two of these areas, a competent elder law lawyer knows that there’s no single formula in elder law that applies across the board. That’s why you’ll need a lawyer with a high level of specialization and understanding to handle your specific circumstances. An elder law attorney is best suited for your specific needs.

A referral from someone you trust is a great place to start. When conducting your elder law lawyer search, stay away from attorneys who charge for their services by the hour. For example, if you need an elder law attorney to work on a Medicaid issue, they should be able to give you an estimate of the charges after reviewing your case. That one-time flat fee will cover everything, including any legal costs, phone calls, meetings and court fees.

When it comes to elder law attorneys, nothing says more than experience. An experienced elder law lawyer has handled many cases similar to yours and understands how to proceed. Reviewing the lawyer’s credentials at the state bar website is a great place to start to make sure the lawyer in question is licensed. The website also has information on any previous ethical violations.

In your search for an elder law attorney, look for a good fit and a high level of comfort. Elder law is a complex area of law that requires knowledge and experience.

Reference: Explosion (Aug. 19, 2020) “The Complete Guide on How to Find an Elder Law Attorney”