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Elder Law 101
Are you
a seasoned citizen (i.e. over age
65), do you care about someone who is, or do you anticipate becoming a
seasoned citizen yourself one day? If so, then you are in good company
according to U.S. Census Bureau statistics. In 1960, there were nearly
17 million seasoned citizens. Today, there are nearly 35 million and by
2010 there will be some 40 million seasoned citizens. Thereafter, due to
the graying of the Baby-Boom generation, we will see that figure jump to
53 million in 2020 and to 70 million in 2030! As this seasoned
population grows, so will the need for Elder Law services.
What is Elder Law?
Generally speaking, Elder Law is the
holistic application of general legal principles to the specific
emotional, logistical and financial needs of seasoned citizens. Many
seasoned citizens are concerned with two fundamental threats to their
dignity: (1) becoming incapacitated and thereby losing control to the
court system regarding their personal, health care and financial
decisions; and then (2) running out of money due to the catastrophic
costs of long-term care and ending up on welfare.
Fortunately, both of these threats may be
minimized or avoided through properly coordinated legal and financial
planning.
Incapacity
Planning
As the number of birthday candles increases on
your birthday cake, so does the likelihood that you will become
incapacitated due to an injury or illness. Whether incapacity strikes
suddenly, as with an accident or acute illness, or gradually, as with
Alzheimer’s, the consequences are the same. Either you will have
appointed the back-up decision-makers of your own selection through
proper legal plans or, by default, the court system must step in to
appoint them for you…under the ongoing supervision of the court.
Note: This default approach will employ at least three lawyers and can
be rather expensive and invasive of your privacy.
Long-Term Scare
Did you know that after age 65 you have a 48% chance that you will need
care in a skilled nursing facility? After age 80 the odds that you will
need skilled nursing care jump to 9 in 10, or 90%. If you are age 65 and
married, the odds are 70% that you or your spouse will need skilled
nursing care. The average nursing home stay, by the way, is 2.5 years.
And the cost of long-term care is expensive.
Nationally speaking, a year in a nursing home is estimated to cost an
average of $57,000. Is it any wonder that 50% of all seasoned citizen
couples become impoverished within a year after either spouse enters a
nursing home? The number jumps to 70% for widowed or single seasoned
citizens.
By the way, forget about Medicare
paying for your chronic long-term care needs. Medicare only pays
for acute nursing home care for up to 100 days, and even then
your eligibility and the payments are subject to very strict
requirements. Remember, too, Medigap (i.e. Medicare Supplement) policies
will not pay for your chronic long-term care needs either.
What about giving away your assets to your
loved ones to qualify for Medicaid (i.e. welfare)? Legally speaking, any
transfer of assets for less than fair market value may render you
ineligible for Medicaid assistance for 36 months, 60 months or more
under the complex and confusing web of Medicaid Regulations. Practically
speaking, once you are rendered ineligible following the transfer of
your assets for less than fair market value, what happens if your loved
ones subsequently lose such assets through squandering, divorces,
lawsuits and bankruptcies?
Long-Term
Solutions
The key to proper long-term care planning is to
plan now rather than react later. There are numerous
legitimate strategies to preserve more of your assets…if you have time
to plan. For example, under a special federal law called the Spousal
Impoverishment Act, married couples may preserve more assets for the
non-nursing home resident, even if the other spouse is
Medicaid-qualified. Some seasoned citizens have turned to Reverse
Mortgages (i.e. borrowing against the equity in their homes) to pay
for their long-term care. By far, however, the best strategy is to
insure your financial security through proper Long-Term Care Insurance (LTCI).
Conclusion
As you can see, Elder Law is complex. Its scope
extends far beyond the issues introduced in this article. Only through a
confidential consultation with qualified legal counsel may you learn the
appropriate solutions for your unique Elder Law challenges.
This
publication does not constitute legal, accounting or other professional
advice. Although it is intended to be accurate, neither the publisher
nor any other party assumes liability for loss or damage due to reliance
on this material.
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